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W. tax calculation problem in case of down payment?

Former Member
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Hi,

I am making a down payment and system is calculating the amount as below:

1) Made a downpayment with special G/L indicator of Rs.500 and deducted TDS Rs50

2) Made an invoice of Rs.2000 and deducted TDS Rs 200, so Invoice is Rs.1800

3) Now, we have cleared the downpayment against this invoice number and system is showing the payment received 450 and invoice 1800 and no information in W.tax tax of F-44 for both. Which means if the we have to make a payment then we have to pay Rs. 1350 - 50 = 1300

4) Ideally, if we check the system should deduct Rs.1400 (2000-500-200), but after entering the payment in F-53 I have checked the system is asking for 1150 payment

Please clarify as I am unable to understand it...

Thanks in advance

Regards

Nitin

Accepted Solutions (1)

Accepted Solutions (1)

former_member220489
Active Contributor
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Basically, you dont need to deduct TDS at both stages.

if you made advance payment thru F-48, then system will use WHT type and code combination which is defined for payment stage and maintained in the vendor master.

So in F-48, system will deduct tds of 50

then when you are preparing invoice, you should change the WHT base value manually to 1500 (2000-adv500), then system will calculate the TDS on 1500 only during invoice.

Even after this, if you clear the DP with F-54, there wont be any issue in terms of TDS calculations.

At last when you make the final payment, system will pay 1350 only.

This is the way you need to follow in case of advances made prior to invoices.

please note that, for your invoice stage WHT type defenition, the indicator Central INV Prop must have selected.

Former Member
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Thanks for your reply Srinivasa Borigi...

I am sorry to say but please check it first I have tried to do it in your way. Here is the explanation:

I have made down payment of Rs.20 paid tax @10% Rs2

I have created the invoice of 100 and W.tax base amount changes to Rs80 and W. tax deducted Rs 8

Now, checked the vendor balance showed me 92-18 = Rs74 which can be accepted.

Now, I have tried to clear it with Rs.74 and when I clicked on the process open item it showed me the balance of Rs.64 which is incorrect as per me. Since, we have already deducted the TDS Rs10 and again system is deducting the tax which is not at all correct.

Please do it practically on you system.

"Central INV Prop" box is checked with option 1 "min check at item level"

Thanks and Regards

Nitin

Former Member
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Hi,

Please don't mind my above reply Srinivasa it is just that I want to clear the concept.

Thanks and Regards

Nitin

Former Member
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Hi Niki,

The problem is due to the Tax code provided in WHT data in Vendor Master,

Tax code should be provided for the Tax type at invoice level and not for Tax type at payment level where in Liable field should be ticked in both the cases. Change the master data and run the program "RFWT0010" & "RFWT0020" in SE38 and try to make a payment for the existing scenario.

YJ.

Former Member
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Thanks for your reply Yogesh!!!

I am sorry you have written two things here:

1) We need to check the tax code for invocie and payment in vendor master and mark as liable which is true and is there in the system.

2) "Tax code should be provided for the Tax type at invoice level and not for Tax type at payment level" which setting are you talking here about "Define Withholding Tax Type for Payment Posting" and the "min Check" settings we have.

Please clarify on the second point and we have checked there "min. check at item level"

Thanks in advance

Regards

Nitin

Former Member
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I am talking about the Tax Type for payment posting.

I think you have created 2 sets of Tax type (TI & TP) and Tax codes (TI & TP) for Invoice posting and Payment Posting, then the same is keyed in the Vendor master under Withholding data screen.

In WHT screen data should be like this:

Tax-Type Tax-Code Liable Recpient

TI TI x CO

TP x CO

Min check only if the settings is required for the client.

YJ

Former Member
0 Kudos

Thanks for your quick replies Nkonnipati and Yogesh!!!

Mr. Nkonnipati,

Yes, I completely agree with you an have understood the concept but the problem is system is asking for Rs.1150 at last at the time of final payment instead of Rs.1350 which I have mentioned. How do I rectify it please.

Mr. Yogesh,

Yes, we have maintained two tax codes one for invoice and another for payment (same %) and assigned them to the vendor master

Please suggest how to clear it correctly...

Thanks in advance

Regards

Nitin

former_member220489
Active Contributor
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Sorry Nitin,

A typing mistake in one of the sentence of my previous reply.

please note that, for your invoice stage WHT type defenition, the indicator Central INV Prop must have selected.

please note that, for your Payment stage WHT type defenition, the indicator Central INV Prop must have selected.

But once you paid down payment of 20 after deducting 2 (tds) = 18 paid

Invoice 100, TDS base value changed to 80 and deducted TDS of 8, so net invoice value is 92.

So now you vendor bal should be 92-20 = 72 only, but not 74 as you mentioned.

Since altogether you need to pay 90 only to tour vendor after TDS, so you have already paid 18, then 72 will be your net payable.

Please check carefully that there is no other open items are also appearing in process open item screen.

msshihab1987
Active Contributor
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HI Friend

I hope You have assigned Tax Type for Invoice Posting and Payment Posting at the Vendor Master data.

You can Fist Make a down Payment Request using F-47 here you can specify the withholding tax code , then you can make payment for the above with T cod e F-48 and specify the withholding tax code and deduct the TDS for the payment

. If you are posting invoice invoice for the full amount you can deduct tds for the invoice , you dont need to change the base amount for the withholding tax. Before making payment for the balance amount you have to clear the Down payment with F-54 . at the time of Balance payment using F-53 you can set of the down payment cleared entry with the balance figure in that case the system automatically reverse the tax you deducted at the time of down payment

Please Test the scenario and write to us you have any queries and please let me know if any thing wrong in this

Thanks & Regards

SHihab

Former Member
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If you have maintained the Tax code created for payment posting in master please remove it and run the program given in earlier message and try to run the payment.

YJ

Former Member
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Thanks for your kind reply Srinivasa...

I think we have to pay the vendor Rs62.

Total Amount = 100

TDS liable = 20

Balance = (100-20) 80

Amount paid = 18

Balance = (80-18) = 62

Total amount paid would be apart from TDS = 62+18 = 80

But, when I have tried to clear it system is showing me the amount left as Rs64 instead of Rs62.

Please suggest why is it happening I am unable to understand it as if now.

Thanks and Regards

Nitin

Former Member
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Thanks for your reply Shihab,

I have checked that already and for full payment system is running fine but not for the part payment. I have already given two examples in the this thread.

Please suggest...

Thanks and Regards

Nitin

former_member220489
Active Contributor
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You are getting confused and trying to make us too.

As per your question the TDS rate is 10%

Total Amount = 100

TDS liable = 10

Balance = (100-10) 90 to be paid to vendor after TDS.

Amount paid by DP = 18 (20-2)

Invoice 92 {100- (80*10/100) }

Balance = (92-20) = 72

It seems like, you have defened your WHT codes with different tax rates in its defenition.

like during payment stage 10 % Invoice state 20% ---Please cross check again

else create a new scenario and check.

Former Member
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Thanks Yogeshji,

I have checked it and it is running fine without TDS on payment and only on TDS on invoice.

Down payment = 30

Invoice = 50

TDS = 5

Payment = (45-30) = 15

No issues...

Please suggest why there is a issue with TDS in advance...

Thanks and Regards

Nitin

Former Member
0 Kudos

Let me explain you the cause with your scenario:

Down payment

Rs.20 on which TDS @ 10% =Rs.2 and paid to vendor is Rs.18

Invoice

Rs100 on which TDS @ 10% on base of 80 = Rs.8 and payable to vendor is Rs. 92

Adjustment of Advance against Invoice in F-58

Rs. 92 u2013 Rs 20 = Rs. 72 but you are getting Rs. 74 this is because system is again performing TDS calculation on the Advance

payment line item (i.e, on Rs. 20 @ 10% = Rs.2) .

To avoid this calculation at payment stage take out the Tax code (TP) given in the vendor payment under line where the Tax type for Payment posting is maintained.

YJ

Former Member
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Thanks for your reply Srinivasa!!!

I am sorry that was a mistake on my part as I tried that on different vendor with 20% rate that is why figures are like that but system is not calculating it correctly.

It was 72 instead of 62

Thanks and Regards

Nitin

msshihab1987
Active Contributor
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HI Friend

please check these process

1) Down payment Request F-47

Vendor A/C Cr 10

2). Down Payment Payment F-48

Vendor A/C Dr 10

Bank Clr

msshihab1987
Active Contributor
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HI Friend

please check these process

1) Down payment Request F-47

Vendor A/C Cr 10

2). Down Payment Payment F-48

Vendor A/C Dr 10

Bank Clr A/C Cr 8

TDS Cr 2

3) Invoice FB60

Expense A/C Dr 100

Vendor A/C Cr 80

TDS CR 20

4) Down payment Clearing

Vendor Dw Payment Req DR 10

Vendor Downpayment Cr 10

5) Vendor Payment F-53

Vendor A/C Dr 80

TDS Dr 2

Bank Clr A/C Cr 72

Vendor Cr 10(Downpayment )

You can post the down payment like this

Former Member
0 Kudos

Thanks for your reply Yogeshji,

But, I hope we are getting it wrong my problem is system is calculating the TDS twice

Let me explain you the scenario:

I tried to explain that in the first scenario:

1) Made a downpayment with special G/L indicator of Rs.500 and deducted TDS Rs50

2) Made an invoice of Rs.2000 and deducted TDS Rs 200, so Invoice is Rs.1800

3) Now, we have cleared the downpayment against this invoice number and system is showing the payment received 450 and invoice 1800 and no information in W.tax tax of F-44 for both. Which means if the we have to make a payment then we have to pay Rs. 1350 which is correct.

4) Ideally, if we check the system should deduct Rs.1350 but after entering the payment in F-53 I have checked the system is asking for 1150 payment.

Here is another example for you:

Down payment

Rs.20 on which TDS @ 10% =Rs.2 and paid to vendor is Rs.18

Invoice

Rs100 on which TDS @ 10% on base of 80 = Rs.8 and payable to vendor is Rs. 92

Adjustment of Advance against Invoice in F-54

Rs. 92 u2013 Rs 20 = Rs. 72

I have checked it system is showing here Rs72 is due.

But when I enter the payment then system is asking to enter Rs62 that means again TDS is getting deducted.

I am sorry if I have written anything incorrect earlier but that is what I have noticed and can see on the system.

Now, Please help..

Thanks and Regards

Nitin

Former Member
0 Kudos

Hi,

Check the program RFWT1000 in se38 transaction for calculation of WT tax for the respective vendor or customer.

Maintain company code , vendor and WT key and execute, then it will show u the WT calculation as well as configuration for the respective WT key.

I hope it will resolve all your queries....

Regards,

Prakash J

Former Member
0 Kudos

Thanks for your replies Shihab and Yogesh!!!

Mr. Yogesh,

I think you have given a very valid point that tax is being calculated at the time when I am making the final payment to the vendor.

You have written this line above:

"To avoid this calculation at payment stage take out the Tax code (TP) given in the vendor payment under line where the Tax type for Payment posting is maintained."

I have two doubts:

1) I can't see any W. tax type in the line item when we are doing payment with F-53

2) Even if system is calculating the tax then then why not system is calculating the tax on the balance amount (say on Rs. 72) why it is calculating on Rs100.

But, something may be happening when we are making the payment as before that everything is correct as per the system.

Thanks and Regards

Nitin

msshihab1987
Active Contributor
0 Kudos

HI Friend

The mistake is happening at the time of Invoice Entry you have to enter the Base Amount as 100 instead of 80 . you dont make any manual entry for base amount. at the time of Payment using F-53 the Debit entry happened through clearing can adjust and the reversal entry is happening at the time of F-53 . So please do not Make any changes in the Base Vlaue

Former Member
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Thanks for your reply prakashcw!!!

Report is showing all configuration as correct...

1) I have done entry in F-48 and checked the status in the program you have mentioned...

It comes up with the error

"Withholding tax amount exceeds total bank line item amounts.

Message no. 7Q320"

Though the entry is:

Vendor A/c Dr. 60

To bank 54

To TDS 6

2) Invoice Entry of Rs100 @10% TDS

Entry:

vendor CR V0 90.00-

Expenses DR V0 100.00

TDS 10.00-

1 Vendor No. IA ZF 10.00 INR

Final Withholding Tax Amount 10.00 INR

3) For the Invoice cleared on the

39 1110020 Vendor 60.00-

26 1110020 Vendor 54.00

40 2541301 TDS 6.00

2 vendor no. AA PF 0.00 INR

Final Withholding Tax Amount 0.00 INR

4) When making the final payment to the vendor system is doing this entry

001 50 Bank 26.00-

002 38 Vendor 54.00-

003 25 Vendor 90.00

004 50 TDS 10.00-

That means system is calculating the TDS at the time we are making the final payment.

Please suggest what shall I do in order to rectify the problem.

Thanks and Regards

Nitin

msshihab1987
Active Contributor
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Hi Friend

The Entry should Be like this

50 0000113131 Bank Clearing 36,00-

38 0000200006 Vendor 60,00-

40 0000177000 TDS 6,00

25 0000200006 Vendor 90,00

Former Member
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Thanks to all of you Shihab, Prakash, Yogesh, Srinivasa nkonnipati for your great help since this morning...

The problem has been resolved and I have checked the Wtax at the time of invoice posings as suggested by you and have deleted the W.tax for Advance posting and have mainatined the correct % in the w. tax base amount.

Then I have been able to post the correct amount at the time of final payment.

My sincere thanks to all of you. I am awarding points....

Thanks and Regards

Nitin

Answers (1)

Answers (1)

narasimhulu_konnipati
Active Contributor
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DP = 500

TDS = 50

Invoice = 2000

TDS = 200

F-54 = System calculate the TDS here on 500 and nullify the one which we have already deducted at DP Level = 50

F-54 = Invoice adjusted with DP = 450 and TDS 50

The total liability of TDS is = 200 Rupees only

When you make the payment through F-53, you will have to pay the Vendor only remaining balance after deducting TDS of 150.

Now, 1350 Rupees you need to pay the Vendor.

Hope it clarifies

Thanks