2.7 Process Product Tax Class Maintenance Detail

This topic provides the systematic instructions to maintain the fund tax classes.

Maintaining Product Tax Class

As part of the endowment products regulatory requirements, the taxes are deducted by the Life Company, where as in Life Insurance business taxes are the policy holder’s responsibility. Therefore the Life Company is responsible for payment of such tax to the SARS (Regulatory Authority) so that the investment returns are tax free at the policy holder’s hand. The tax varies among the policy holder depending upon the policy holder’s category, which is one among the following. These are called as Four Fund Tax Classes.

• Individual Fund (IPF)
• Corporate Fund (CPF)
• Retirement Fund (RPF)
• Untaxed Fund (UPF)

The system supports Four Funds Tax Class functionality in the following manner:

• First the system derives the Tax class of the policy based on the Product and UH Category using Product Tax Class Maintenance(LEDPRTAX) screen
• At the fund level the funds are grouped using Fund Rule Maintenance (UTDFNDRL) for Tax Class Switch
• Then four different funds are created for each Fund Tax Class under one Fund Group
• Fund Rule Maintenance [UTDFNDRL]
• Fund level indicator is used to specify Fund Tax Class. The Fund Tax Classes are:
  • Individual Fund (IPF)
  • Corporate Fund (CPF)
  • Retirement Fund (RPF)
  • Untaxed Fund (UPF)
  • Client Responsible Tax (CRT)

Policy Tax Class will get defaulted from Product Tax Class maintenance. And if UH Category gets modified, upon its authorization, system automatically changes at EOD all the underlying policy Tax Class to new policy tax class (based on the new UH Category and Product combinations) and update the SI’s with new tax class fund id’s and generates 100% switch transactions form the old policy tax class funds.

Specify User ID and Password, and log in to Home Screen.

1. On Home screen, type LEDPRTAX in the text box, and click Next.
   You can create four different funds for each Fund Tax Class under one Fund Group.
   The Product Tax Class Maintenance Detail screen is displayed.

   Figure 2-7 Product Tax Class Maintenance Detail

   
   

   
   Description of "Figure 2-7 Product Tax Class Maintenance Detail"

   
   
2. On Product Tax Class Maintenance Detail screen, click New to enter the details.
   For more information on fields, refer to the field description table.

   Table 2-4 Product Tax Class Maintenance Detail - Field Description

   Field	Description
   UH Category	Alphanumeric; 2 Characters; Mandatory Specify the Unit Holder category details. Alternatively, you can select the UH Category from the option list. The list displays all valid UH Category details maintained in the system.
   Product ID	Alphanumeric; 10 Characters; Mandatory Specify the product ID. Alternatively, you can select the Product ID from the option list. The list displays all valid Product ID maintained in the system.
   Tax Class	Alphanumeric; 3 Characters; Mandatory Specify tax class details. Alternatively, you can select tax class details from the option list. The list displays all valid Tax Class details maintained in the system.
   Sub Type	Alphanumeric; 3 Characters; Mandatory Specify the sub type code after entering the transaction type, for which the Sub type transaction is processed.

Save the information entered

3. Click Save when you have entered all the mandatory information.
   The system displays the following confirmation message Record Successfully Saved.
4. Click Ok button from the dialog box.
   This indicates the record has been saved.