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Former Member
Nov 17, 2010 at 12:04 PM

TDS to be deducted on interest accrual of Fixed Deposit



We are implementing Fixed Deposit Accounting in Treasury for our client. There are 4 FD schemes where interest is paid on Maturity and the term of these schemes are 25 months, 39 months and 60 months.

The current practice being followed by business is to post accrual entry for Interest only once a year i.e. during year end closing but payment is on Maturity only. They also make an appropriate payment of TDS to the IT authorities at the time of accrual of interest (at each year end) based on the amount of interest accrued and not the amount of interest paid. Additionally, they also issue a TDS certificate to the FD holder for each Financial Year.

How do you think we can deal with this in SAP. TDS is only deductible at the time of payment of interest to the Customer and not on accrual as the customer account in SAP, remains unaffected during accrual

(entry on accrual is -

Interest Exp Dr

To Prov for Interest Cr)

Request your assistance to solve this critical issue.



+91 99232 05169.