How to Handle TDS in FICA on Interest Receivable.

[SachinPatil]

Hello All,

I am working on Implementation Project in IS-Utilities in INDIA.

Here I am not able to catch logic about TDS on Interest Receivable transaction.

Case is as follows:

For Industrial Customers we charge interest on late payment of Interest amount.

The customer at the time of payment pays actual amount less TDS ( Interest Amount - TDS Amount).

The open item of customer in my system is of interest amount, not of ( Interest Amount - TDS)

So, How to cater this case in system.

Is there any specific Event to solve this problem?

Please reply....

Thanks,

Sachin

FICA Cert. Consultant

[AmlanBanerjee · Accepted solution]

Hi Sachin,

I think you want to post the TDS amount in SAP as well at the time payment is posted into SAP,

If my above understanding is correct, then you can cater this through event 0032.

Event 0032 can create additional line items for a document in Contract Accounts Receivable and Payable.

So, you will get the payment document in this event and can do the respective checks as per the business logic and then calculate the TDS amount and pass the values to any standard FM , like   FKK_COMPLETE_CHARGE_DOCUMENT to post the TDS amount into the account.

Hope it helps in answering your query.

Thanks,

Amlan

[ivor_martin]

Hi,

What is the business requirement in regards to the Accounting entries?

For the purpose of clarification:

Interest amount Rs 100 (posts to GL Account 3000010)

TDS Amount (as required by business, of 3% of the Interest, must post to GL Account 5000020).

Customer's Invoice shows Rs 97 as late payment charge. Does it need to show the $3.00 as TDS amount?

The TDS amount (rs. 3.00)  needs to be posted to the GL  5000020 upon  payment? or can it be posted when the LPC is posted during Invoicing?

Please let me know.

Regards,

Ivor M.

[SachinPatil]

Dear Amlan / Ivor,

Thanks for your time.

My Scenario is as follows:

Bill / Invoice Amount Say: Rs 1000 Due on 20-05-2012

After Due date say on 07-06-2012 payment would be Rs 1000 + Rs 200 ( Interest Amount)

Customer will pay Rs 1000 as bill amount &

Rs 180 of Interest amount by deducting TDS of Rs 20 from Rs 200 Net Interest Amount.

i.e Here particulars would be:

Rs 1000 : Invoice Amount

Rs 180 : Interst amount

Rs 20 : TDS Deductable ( Deducted by Customer)

In System:

I would be calculating line item of Rs 200 as whole as Interest Amount.

So my question is how to handle Actual Interest Amount received & TDS deducted by Customer.

Rgds,

Sachin P

[Former Member]

Hi dear sachin....

from the above line's which are specified when the invoice payment is made with additional interest and deducted tax amount with a different line items has to be post. for this you have to maintain withholding tax code level settings with a selection of  'posting with payment' selection box under withholding tax posting....

i think this area will effect u expected result..

let's try and revert back

thanks...

Honey

[AmlanBanerjee]

Hi Sachin,

You can use event 1110 for your purpose.

This event creates the G/L items for tax on sales/purchases (structure FKKOPK) from the information in the business partner items (structure FKKOP, fields "net amount" and "tax on sales/purchases code").

So, on Rs.200 you can calculate tax and post it as a separate line item.

Hope it helps.

Thanks,

Amlan

[Former Member]

Hi Sachin

This is with holding tax. The process is as below.

1.    1. Define withholding tax code and withholding tax type

2.    2. Maintain withholding tax rate.

3.    3. Assign withholding tax code to contract account master data in payments/taxes tab.

     Regards

     Srinivas

Re