Withholding tax - accumulation type

[former_member1147135]

Dear all,

I want to know,

How the accumulation type of withholding tax is worked?

What is the use of Accumulation type in withholding tax?

Why should we accumulate the amount?

How the vendor threshold limit is mapped in withholding tax configuration?

Regards

Mahesh

[Former Member]

Dear Mahesh,

Can you please tell where do you find the Accumulation type,

Please tell us the SPRO path.

Regards,

Alok

[former_member1147135]

Financial Accounting (New) >> Financial Accounting Basic Settings (New) >> Withholding Tax >> Extended Withholding Tax

>> Calculation >> Withholding Tax Type >> Define Withholding Tax Type for Invoice Posting.

[former_member1147135]

>> Financial Accounting (New) >> Financial Accounting Basic Settings (New) >> Withholding Tax >> Extended Withholding Tax

>> Calculation >> Withholding Tax Type >> Define Withholding Tax Type for Invoice Posting.

[Former Member]

HI,

How the accumulation type of withholding tax is worked?

You define a amount limit in the withholding tax code formula whereafter tax code mapped to vendor will not post TDS till the amount mentioned here is reached for the fiscal year.

What is the use of Accumulation type in withholding tax?

How long you want to accumulated amount. For e.g if you have selected per quarter and maintain limit in formula is 15000 then vendor will be deducted withholding tax if total invoice goes above 15000 in one quarter..

Why should we accumulate the amount?

It is a government rule...

How the vendor threshold limit is mapped in withholding tax configuration?

Practically not possible......it can with different tax code but it is not the logical solution..

Regards,

Chintan Joshi

[former_member1147135]

1) What is the use of Accumulation types?

a) No Accumulation

b) Per calender year

c) Per quarter

d) Per month

e) Per year, Starting with month.

2) Is It required to change accumulation types from new fiscal year, for the old tax types?

Regards

Mahesh

[Former Member]

Dear chintan Sir,

Can you send us any SAP documents on the setting of Witholding Tax Type for Invoice as well as Payment. Functional knowledge about accumulation type is required.

Regards,

Alok

[Former Member]

Hi Chetan,

Can please tell me how can I accumulate the all the transaction for the fiscal year. Is there any program or tcode for this.??

Reg

Abhi

[ameet_desai]

Hi,

How the accumulation type of withholding tax is worked?

What is the use of Accumulation type in withholding tax?

If accumulation is active, the accumulated withholding tax base amount in the current period (month, quarter, year) is added to the withholding tax base amount of line item, for which the withholding tax amount is to be calculated.

The withholding tax amount is calculated by applying the withholding tax rate or the relevant scale to this figure, then subtracting the withholding tax amount accumulated over the period in question. The current withholding tax base amount and the withholding tax amount are added to the appropriate values in the accumulation table. The accumulated amount is entered in the relevant local currency of the company code according to the vendor/customer account, withholding tax type and withholding tax code.

Why should we accumulate the amount?

If we have certain conditions below which the tax is not to be deducted then this is to be used. For e.g. in India If the Rent Amount for the entire year does not exceed 120000/- then no tax is to be deducted.Then if we accumulate the transaction amount of all the transactions made, the system is able to determine whether tax is to be paid or not.

How the vendor threshold limit is mapped in withholding tax configuration?

There are settings in SPRO to maintain mim & max amounts for vendor threshold limits. We can also use formulas to do this.

Thank You.

Regards,

[Former Member]

Hi Amit,

Can please tell me how can I accumulate the all the transaction for the fiscal year. Is there any program or tcode for this.??

Reg

Abhi