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Withholding TAX CODE Calculation

Active Contributor
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There is Tax code for given requirement,

Section 194I Rent 2 %

But the issue is that created tax code is caculating on basic amount not taking into consideration of Service tax amount.

What could be the reason.If any body can help me out.

Thanks in advance.



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Active Participant
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a) If you are entering in FI module side in FB60 or F-43 or other tcodes, then check in editing options in "calculate taxes on net amount" - this is mainly how the tax is calculating and getting updated, so that the same amount can be entered in vendor field and the same vendor amount can be considered in withholding tax tab in withholding tax base and accordingly 194I rent 2% will be calculated

b) check in customization in withholding tax type

path: extended withholding tax - calculation - withholding tax type for invoice or payments. double click the withholding tax type and check the calculation for base amount whether it is in gross amount or in net amount and accordingly test and decide.

Also check in withholding tax code as whats the percentage subject to tax for base amount, if it is 100%, then it would also consider the service tax amount as well.

Hope this helps.