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Withholding tax exemption

Former Member
0 Kudos

Hi,

We have following requirement :

Vendor is exempted for withholding tax up to 100000

if we are posting an invoice of 90000, there should not be any tax. Then after if we post invoice of 50000, tax should be calculated on 40000 only. How we can make this process happen ?

Accepted Solutions (1)

Accepted Solutions (1)

former_member198650
Active Contributor
0 Kudos

Hi Fawaz,

Maintain w.h.tax formula for the w.h.tax type/code as shown below:

Regards,

Mukthar

Answers (2)

Answers (2)

Former Member
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Need one more clarification:

At the time of taking return file for the vendor, I should get Exception details. what is the the configuration for this ?

former_member198650
Active Contributor
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You can maintain exemption details in the vendor master itself.

Former Member
0 Kudos

Do we need to classify exemption reason and assign to tax code ?

former_member198650
Active Contributor
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Yes, you can. But it is applicable to all vendors who are maintained with this tds codes.

Former Member
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In J1inqefile invoice amount of vendors with exception is coming. how can we generate exception reason in the file.

Former Member
0 Kudos

Hi,

Define the exemption reasons and classify exemption reason for the section in IMG.

The same reason should be maintained in Vendor Masters.

system automatically fetch the exemption reason at the time of  efile Generation.

Regards,

Prasanthi

Former Member
0 Kudos

where i should give Exception reason. in Cin details or in withholding details tab. If i give Exemption reason in withholding details tab, system is not calculating tax while posting invoice. but if i give it in cin details, itz fine.

one more thing is - Should i select 100 % exemption in Q file generation screen ?

Former Member
0 Kudos

We are using FIWTIN_QRETURNS

Former Member
0 Kudos

Hi,

you should maintain the Exemption reason in CIN details - TAN EXEMPTION TAB

the combination will be Section code , exemption date,exemption rate and exemption reason.

if you maintain as above in vendor masters, you can generate the EFILE with exemption reason.

the new program is RPFIWTIN_QRETURNS

Regards,

Prasanthi

Former Member
0 Kudos

In my case exemption is like upto 10000- no tax. so what should i give in Exemption rate field(CIN details) ?

sanilbhandari
Product and Topic Expert
Product and Topic Expert
0 Kudos

Hi

You can use the accumulation type feature in withholding tax type definition. Additionally use formula in with holding tax configuration to specify the amount limit and percentages. In this case, the percentages will be specified in formulae and not in with holding tax code. The required paths in configuration are as under:

IMG>Financial Accounting (new)>With Holding Tax>Extended With Holding Tax >Calculation>With Holding Tax Type >Define with holding tax type for invoice posting

IMG>Financial Accounting (new)>With Holding Tax>Extended With Holding Tax >Calculation>With Holding Tax code >Define formulas for calculating with holding tax


regards


Sanil Bhandari

Former Member
0 Kudos

Is there any thing to do in vendor master ?

former_member198650
Active Contributor
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Nothing to do in the vendor master, you just maintain the w.h.tax type/code along with liable check box.

Former Member
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If a vendor is having old balance of rs 80000 or something, this needed to be taken as exempted amount right. So which accumulation type should i use ?

former_member198650
Active Contributor
0 Kudos

You have to take accumulation type for a year and starts from the month 4 (April).