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Configuring Withholding Tax (TDS)

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Configuring Withholding Tax (TDS)
Stechies

Two types of Withholding tax. Classic and Extended. Classic W/T means when the tax is deducted only at the time of payment and extended W/T means when the tax is deducted at the time of booking of invoice or payment which ever is earlier. In Indian context the extended w/t is applicable

Migration from classic W/H tax is possible but not vice versa.

Before configuring the withholding tax part first create GL accounts for the Tax and surcharge payable theron. For example in cse of TDS on Contractors u/s 194 C following accounts will be opened in the GL:

  • TDS Payable
  • Surcharge on TDS Payable
  • Cess Payable

Check Withholding tax Countries

Financial Accounting
Financial Account Gloabal Setting
Witholding Tax
Extended Withholding Tax
Basic Setting
Check W/T Countries

Check the country code specified by the system for a country specific. If not there create new.

WITHHOLDING TAX

Define Official Withholding Tax Code (Key)

Financial Accounting
 Financial Account Gloabal Setting
   Witholding Tax
    Extended Withholding Tax
      Basic Setting
      Define Official Withholding Tax Code

WITHHOLDING TAX

Define Reasons for exemption

Financial Accounting
 Financial Account Gloabal Setting
   Witholding Tax
    Extended Withholding Tax
      Basic Setting
       Define Reasons for exemption

WITHHOLDING TAX

Define Business Places

Financial Accounting
 Financial Account Gloabal Setting
   Witholding Tax
    Extended Withholding Tax
      Basic Setting
       India
       Define Business Places

WITHHOLDING TAX

Assign Factory Calendar to Business Places

Financial Accounting
 Financial Account Gloabal Setting
  Witholding Tax
   Extended Withholding Tax
     Basic Setting
      India
      Assign Factory Calendar to Business Places

 

WITHHOLDING TAX

Maintain Tax Due Dates

Financial Accounting
 Financial Account Gloabal Setting
  Witholding Tax
   Extended Withholding Tax
     Basic Setting
      India
      Maintain Tax Due Dates

WITHHOLDING TAX

Define Withholding Tax Type for Invoice Posting

Financial Accounting
 Financial Account Gloabal Setting
  Witholding Tax
   Extended Withholding Tax
     Calculation
     Define Withholding Tax Type for Invoice Posting.

Method 1   Method 2

TDS    2    2%
Surcharge   10% of Tax Amount  0.20% of the Gross Bill Amount
Cess    2% of TDS+Surcharge  0.044% of the Gross Bill Amount

WITHHOLDING TAX

Define Withholding Tax Type for Payment Posting

Financial Accounting
 Financial Account Gloabal Setting
  Witholding Tax
   Extended Withholding Tax
     Calculation
     Define Withholding Tax Type for Payment Posting

WITHHOLDING TAX


Comments

  • 26 Mar 2009 8:16 am
    Hi,

    Wonderful explanation!. Thanks a million.

    Question re: Expenses GL code information against TDS Deducted

    Our Tax Auditors are asking for a report for Section 40 A(i) furnishing
    details of Expenses Code against each tax Deducted at Sources.

    I have searched in J1INMIS , but this gives vendor wise TDS information.
    How can I get Expenses GL Code against each line item of TDS as per
    J1INMIs.

    Could you please help ? (Hfm_a@yahoo.com)

    Thank you.

    Austin

  • 06 Apr 2009 2:31 pm
    Hi

    I want to know the withholding tax concept in India.

    For Eg: If we are paying to a German vendor for the the financial product services, do we need to charge WTH tax
    if so what will be percentage.

    It will be really helpful if we provide more details on the basis for calculation of withholding tax

    Thanks
    Soma
  • Shalesh Singh Visen
    29 Jun 2009 1:03 pm
    Execute the program in SE38, RFTW0010, select the Vendor code & tick in Vendor Check Box. First run in Test Mode & then in Updated mode.
  • 12 Oct 2009 7:34 am
    Hi
    I am doing quarterly return of TDS throught SAP
    for that i am using T Code J1inqefile. The E-file is generating in system in old text format, but i want it in new format.

    Could you please help ?????

    Thanks
    Shiriram
  • 19 Jan 2010 11:33 am
    Hi,

    Request help on TDS returns to be filed & Certificates to be generated, for freight provisions for which open items exist, however with no reference to vendor or Purchase order. These provisions are created during STOs or Sales Billing.

    All help appreciated.

    Thanks in advance!

    Prasanna K
  • 23 Apr 2011 7:26 am
    Thank you for u r efforts giveing informations I Know total configuration total withholding tax but only diduct 2% TDS from vendor invioce or payment ok hear special i want to lear how to configure surcharges and cess at the same time how to generate tax Forms please help any one. please cofiguration information send to my mail id maddineni.sapfico@gmail.com.

    Thanks
    Venkey M