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https://help.tallysolutions.com/docs/te9rel64/Payroll/Creating_Reimbursement_Pay_Head.htm

Creating Reimbursement Pay Head (Payroll)

You can create a reimbursement pay head to account for the reimbursements to be paid to employees, and set the net salary and income tax components accordingly.

To create the reimbursement pay head

1. Go to Gateway of Tally > Payroll Info. > Pay Heads > Create .

2. Enter the pay head name in the Name field.

3. Select Reimbursement as the Pay head type from the list of Pay Head Types.

4. Select the Income t ype for the pay head.

5. Select Indirect Expenses from the List of Groups in the Under field.

6. Set the Affect net salary option according to your requirement.

7. Enter the Name to appear in Payslip if you want to change the default pay head component name. By default, the pay head component name entered in the Name field appears in the pay slip.

8. Enable the option Set Alter Income Details.

9. In the Income Tax Details screen:

Select Other Earnings/Allowances (Fully Exempted) as the Income Tax Component , if the pay head is exempted from Income Tax.

Set On Actual Value as the Tax Calculation Basis as reimbursements are not projected, and may vary each month.

By default, the Deduct TDS Across Period(s) field is set to No because tax is deducted in the same month as when the reimbursement is paid.

10. Select As User Defined Value as the Calculation type .

11. Press Enter to save.