Hi Guru's
Whenever there is a lower deduction for TDS, sometimes, the Income Tax Department gives the Lower Exemption Certificate up to certain limit.
For e.g.:
For Vendor A, we are deducting TDS U/S.194C with 2%. But now the vendor has produced the exemption certificate (issued by Income tax department)
for deducting TDS @ 1% up to the maximum of Rs.500000 for the financial year 2008-2009. i.e. if the payment to vendor A is less than or equal to Rs.500000, (for the financial year 2008-2009) the TDS is to be deducted @ 1%, if it exceeds such limit, the TDS is to be deducted at normal rate i.e.2%.
At present, there is an option in SAP, where i can give exemption % (i.e. in this case 50%), but there is no option to specify such maximum exemption limit.
Now, we have to make a note for each and every vendor, how much is the limit, and while making payment, we have to verify how much the payment is
Already made in the financial year 2008-2009.
As such cases are increasing day by day, it is better to maintain such data in SAP, which will be also being useful for future reference.
Kindly help on this regards.
Regards,
Prakash.