Withholding Tax Exemption

[Former Member]

Hi

I have a Vendor which was subject to TDS @22.66. Recently he got an Exemption certificate from the Income Tax department which said that he was NOW subject to TDS @ 12.33. Now my problem is how to deduct TDS for this person.

Should I prepare a New WHT code for this Vendor? If Yes, then for each and every Vendor who gives me a Exemption Certificate will be given a NEW WHT Code?

Please guide me.

Thanks and Regards

Kanwaljit

[Former Member]

Hi Kanwaljit,

You do not need to create a new tax code. Just go to FK02 select the vendor you want to update master for and select the withholding tab and enter.

Now against tax type & tax code TDS fill following

Exemption Number No. on the cert. given by vendor

Exem% 45.58

Exemp Re. Enter if you have defined in the system otherwise leave.(this is optional)

E.From There will be a validity period for exemption on the certificate given dep to vendor.

enter that validity.

Exempt to

Caution Only insert exemption details for tax type & tax code for TDS not ECESS,HEcess,Surcharge.

it will help you..........

Edited by: Chintan Joshi on May 15, 2009 1:52 PM

[Former Member]

Hi

You have to do some configuration

SPRO > IMG > Financial Accounting (New) > Financial Accounting Global Settings (New) > Withholding Tax > Extended Withholding Tax > Basic Settings > Define Reasons for Exemption

Here define your exception reason .

Then go Vendor master change XK02 or FK02 and click on withholding tax and Enter

There you find Exemption number - put Exemption certificate number (comes from vendor)

Exemption rate - put exemption rate

Reason for exemption- put value that you create in SPRO

exemption from - i.e 15.05.2009

exemption To - i.e. 14.06.2009 (so your interval is 1 month)

now pass a entry with that vendor take that tds code - you can see that your correct tds amount is coming

Regards

Tanmoy

[ameet_desai]

Hi Kanwaljit,

No you do not need to create a new tax code for the vendor. You will have to do the following configuration:

Extended Withholding Tax> Basic Settings> Define Reasons for Exemption

ER - Certificat no.of exemption.

After this maintain the exemption code (ER) in the vendor master with the % of Exemption and the [period for which it is applicable.

Thank you.

[saikrishna_vallurupalli]

no need to create New WHT code, just give 50% at Exemption rate field , exemption reason and exemption certificate number in vendor master.

please ensure the 50% only for basic tax not eduction cess and SHED cess, so you have to give the 50% only for basic tax code.

let me know if u have any issue.