diff --git a/erpnext/hr/doctype/salary_component/salary_component.json b/erpnext/hr/doctype/salary_component/salary_component.json
index 5595fcc1b7..ca7378b5c9 100644
--- a/erpnext/hr/doctype/salary_component/salary_component.json
+++ b/erpnext/hr/doctype/salary_component/salary_component.json
@@ -15,6 +15,7 @@
    "allow_on_submit": 0, 
    "bold": 0, 
    "collapsible": 0, 
+   "columns": 0, 
    "fieldname": "salary_component", 
    "fieldtype": "Data", 
    "hidden": 0, 
@@ -40,6 +41,7 @@
    "allow_on_submit": 0, 
    "bold": 0, 
    "collapsible": 0, 
+   "columns": 0, 
    "fieldname": "salary_component_abbr", 
    "fieldtype": "Data", 
    "hidden": 0, 
@@ -67,6 +69,7 @@
    "allow_on_submit": 0, 
    "bold": 0, 
    "collapsible": 0, 
+   "columns": 0, 
    "fieldname": "description", 
    "fieldtype": "Small Text", 
    "hidden": 0, 
@@ -92,6 +95,7 @@
    "allow_on_submit": 0, 
    "bold": 0, 
    "collapsible": 0, 
+   "columns": 0, 
    "fieldname": "accounts", 
    "fieldtype": "Table", 
    "hidden": 0, 
@@ -113,6 +117,33 @@
    "search_index": 0, 
    "set_only_once": 0, 
    "unique": 0
+  }, 
+  {
+   "allow_on_submit": 0, 
+   "bold": 0, 
+   "collapsible": 0, 
+   "columns": 0, 
+   "fieldname": "type", 
+   "fieldtype": "Select", 
+   "hidden": 0, 
+   "ignore_user_permissions": 0, 
+   "ignore_xss_filter": 0, 
+   "in_filter": 0, 
+   "in_list_view": 0, 
+   "label": "Type", 
+   "length": 0, 
+   "no_copy": 0, 
+   "options": "Earning\nDeduction", 
+   "permlevel": 0, 
+   "precision": "", 
+   "print_hide": 0, 
+   "print_hide_if_no_value": 0, 
+   "read_only": 0, 
+   "report_hide": 0, 
+   "reqd": 1, 
+   "search_index": 0, 
+   "set_only_once": 0, 
+   "unique": 0
   }
  ], 
  "hide_heading": 0, 
@@ -126,7 +157,7 @@
  "issingle": 0, 
  "istable": 0, 
  "max_attachments": 0, 
- "modified": "2016-07-27 17:40:18.335540", 
+ "modified": "2016-08-29 05:33:22.495594", 
  "modified_by": "Administrator", 
  "module": "HR", 
  "name": "Salary Component", 
diff --git a/erpnext/hr/doctype/salary_structure/salary_structure.js b/erpnext/hr/doctype/salary_structure/salary_structure.js
index a108e38a0d..0dce0a4ab6 100755
--- a/erpnext/hr/doctype/salary_structure/salary_structure.js
+++ b/erpnext/hr/doctype/salary_structure/salary_structure.js
@@ -13,6 +13,23 @@ cur_frm.cscript.onload = function(doc, dt, dn){
 }
 
 frappe.ui.form.on('Salary Structure', {
+	onload: function(frm) {
+		frm.set_query("salary_component", "earnings", function() {
+			return {
+				filters: {
+					type: "earning"
+				}
+			}
+		})
+		frm.set_query("salary_component", "deductions", function() {
+			return {
+				filters: {
+					type: "deduction"
+				}
+			}
+		})
+	},
+	
 	refresh: function(frm) {
 		frm.trigger("toggle_fields")
 		frm.fields_dict['earnings'].grid.set_column_disp("default_amount", false);
diff --git a/erpnext/patches.txt b/erpnext/patches.txt
index ba82a2367a..436bbdb8a8 100644
--- a/erpnext/patches.txt
+++ b/erpnext/patches.txt
@@ -316,3 +316,4 @@ erpnext.patches.v7_0.fix_duplicate_icons
 erpnext.patches.v7_0.move_employee_parent_to_child_in_salary_structure
 erpnext.patches.v7_0.repost_gle_for_pos_sales_return
 erpnext.patches.v7_1.update_total_billing_hours
+erpnext.patches.v7_1.update_component_type
diff --git a/erpnext/patches/v7_1/update_component_type.py b/erpnext/patches/v7_1/update_component_type.py
new file mode 100644
index 0000000000..f57b1d151d
--- /dev/null
+++ b/erpnext/patches/v7_1/update_component_type.py
@@ -0,0 +1,13 @@
+import frappe
+from frappe.utils import flt
+
+def execute():
+	sal_components = frappe.db.sql("""
+		select DISTINCT salary_component, parentfield from `tabSalary Detail`""", as_dict=True)
+
+	if sal_components:
+		for sal_component in sal_components:
+			if sal_component.parentfield == "earnings":
+				frappe.db.sql("""update `tabSalary Component` set type='Earning' where salary_component=%(sal_comp)s""",{"sal_comp": sal_component.salary_component})
+			else:
+				frappe.db.sql("""update `tabSalary Component` set type='Deduction' where salary_component=%(sal_comp)s""",{"sal_comp": sal_component.salary_component})
\ No newline at end of file