Withholding Tax Issue

[Former Member]

Dear all,

I have issue regarding withholding tax,Earlier we have deducted the TDS on Gross amount including Service tax now as per circular we can deduct the TDS only on Rent,we have to manually change the base amount & tax amount because system picks the whole amount including service tax when the users are entering invoice through F-43 to FB60.How to Map this in SAP.

Waiting for your useful answers.

Regards,

Aakash

[Former Member · Accepted solution]

This message was moderated.

[Former Member · Accepted solution]

Hi,

Please check the withholding tax type for Invoice Posting and Payment Posting. Check the following IMG

IMG > Financial Accounting (New) > Financial Accounting Global Settings (New) > Withholding Tax > Extended Withholding Tax > Calculation > Withholding Tax Type > Define Withholding Tax Type for Invoice Posting AND Define Withholding Tax Type for Payment Posting

Select the withholding Tax type and check the base amount. it should be Gross Amount

Regards,

Jigar

[Former Member · Accepted solution]

Hi Aakash,

U can define separate tax code for that purpose i.e TDS on Rent and u can assign it to the tax type.

[Former Member · Accepted solution]

Hii Jigar

Thanks for your reply

We have already checked gross amount but as far as i know when we check this indicator the system picks the gross amount of invoice as base amount but my requirement is we want to pick only Rent amount (excluding service tax amount) as base amount.

Regards,

Aakash

[Former Member · Accepted solution]

Hii krishna priya

I can define new tax codes but how can i differentiate rent amount & service tax amount in invoice we want Only Rent amount(excluding service tax amount) as base amount.

Regards,

Aakash

[Former Member · Accepted solution]

Hi,

Please check the settings in Withholding Tax Codes

Financial Accounting (New) > Financial Accounting Global Settings (New) > Withholding Tax > Extended Withholding Tax > Calculation > Withholding Tax Code > Define Withholding Tax Codes

Please check whether Percentage Subject to Tax is 100%?

Regards,

Jigar

[Former Member · Accepted solution]

Hi,

After defining separate tax code it will calculate on rent amount i.e., base amount only

[Former Member · Accepted solution]

Hii Jigar..

Yes it is 100%.

Regards,

Aakash

[Former Member · Accepted solution]

Any ideas...

[Former Member · Accepted solution]

Hi Akash if i am not wrong , plz try by changing the Tax type to net Amount To Calculate tds , With out Calculating on inclusive of serive tax

[Former Member · Accepted solution]

hii prasanna raj

What will be the difference between gross amount & net amount.How system will pick the expense amount only excluding service tax.

Regards,

Aakash

[Former Member · Accepted solution]

Any ideas.....

[Former Member · Accepted solution]

hi gross amount is inclusive of taxes on sales/purchase like servise tax, vat etc.

so if u put it as net thn it'll calculate on net amount with out including tax amount which u want to exclude

[Former Member · Accepted solution]

hi Net Amount is base amount-tax(i.e, Service tax, Excise duty etc.)

ur issues is tda should be calculated by excluding service tax right thn here ur problem will be solved by taking net amount as base amount

[Former Member · Accepted solution]

Hi Friend

plz tell for any other Clearifications did ur problem solved or not

[Former Member]

Hi Dear,

Change the tax type of 194I ( Rent ) for select the option Net Amount system will automatically take the base amount as net ( exclusive of tax ). pls check

regards

Dipak

[Former Member]

Hi

As per my understanding u want to calculate the tax amount only on rent not on any other amount. If i understand ur problem correctly, u have to make changes to the invoice tax type or have to define new tax type. If u want to make changes to the existing one then u have to tick for manual entry for the base amount or u have to enter manually the tax amount.

Another way could be the modified net amount by choosing the internal processing key, but i have no knowledge about internal processing key.

Hope it may help u to solve ur problem.

Regards,

Prafful Kansal

[Former Member]

hi,

hi gross amount is inclusive of taxes on sales/purchase like servise tax, vat etc.

so if u put it as net thn it'll calculate on net amount with out including tax amount which u want to exclude

regards,

Ramaiah

[saikrishna_vallurupalli]

SAP HAS release note, where in solution has given

note no. 1170754

[Former Member]

Hiii Sai Krishna Vallurupalli

Thanks for your reply

I have done the changes as prescribed in the note but the problem still remains.

Regards.

Aakash