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Former Member

TDS India: 194C Contractors/Subcontractors

HI!

As per Indian taxes, section 194C TDS has to be deduct 1% on other than company and 2% on company. But it has some threshold limits as if a single contract exceeds Rs.30000/- or all contracts exceeds Rs.75000/- in a year, you have to deduct TDS from that particular vendor. Once TDS attracts in one of the both conditions TDS deduction has to continue on each bill for that year. Inaddition to that, at the time of TDS attract in one of the both conditions, TDS has to calculate for all previous contracts which is below threshold limit at that time in addtion to the present contract base amount which is exceed threshold limit.

Pls....give me step by step process of configuration by satisfying above all conditions for a single vendor.

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  • author's profile photo Former Member
    Former Member
    Posted on May 07, 2011 at 06:19 PM

    Dear Srinivasrao,

    Both threshold limit is not possible in sap.

    For yearly threshold limit you can use the Accumulation Type as Yearly in Define Withholding tax type for invoice posting

    And maintain the minimum amount as 75000 in maintain min amount config.

    \

    Now when ever the total invoice value is less than 75000 tds will not be deducted once it cross the limit tds will be deduct on the whole invoice value till date posted.

    For single invoice thing sorry i don't have any idea but lets see if any one can guide us

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