SAP Financial Accounting (FI) Taxes (FI-AP/AR) Classic Withholding Tax

Use

Under the terms of the Income Tax Act, you are required to calculate withholding tax (tax deducted at source, or TDS) when you post a vendor invoice. The system calculates withholding tax at the time of payment. To handle this difference in the calculation of the tax and to incorporate additional requirements, such as withholding tax certificate printing and annual returns, additional functions are provided.

Features

The withholding tax for an invoice or a down payment is calculated at header level. That is, only one withholding tax code can be used for a down payment or invoice. This implies that an invoice cannot contain items with different withholding tax rates. It can, however, contain one or more items with the same withholding tax rate and one or more items with no withholding tax. This can be handled by specifying the base amount on which withholding tax is to be calculated. On account of calculation at header level, companies have to instruct their suppliers not to include items with different withholding tax rates in a single invoice, but issue separate invoices for different tax rates.

The system also allows you to print TDS certificates for vendors, and to reprint or cancel them if necessary. In addition, you can also prepare TDS returns.