Add a component as non-taxable

Follow these steps to add a component as non-taxable:

Refer to the following steps to add a component as non-taxable:

Step 1. Navigate to Control Panel → Payroll → Arrear.

Step 2. A new page opens.

Step 3. Click "Add Arrear".

Step 4. A window opens with details.

Step 5. Select the employee.

Step 6. Title: Enter the arrear title (name of the component).

Step 7. Description: Type any note for the component.

Step 8. Type: Select the type as per the component, such as Earning, Deduction or CTC.

Step 9. Category: Select Non-Taxable as the category.

Step 10. Calculation Mode: Select "Amount".

Step 11. Value: Enter the amount.

Step 12. Transaction Date: Enter the 1st date of the month in which you want to run payroll.

Step 13. Arrear Status: Always keep it as "Unprocessed".

Step 14. Click "Add".

Step 15. Run the payroll again for the employee. You then see the component as non-taxable on the Tax Computation Page.