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Withholding tax is not getting reversed while adjusting the Advance.

Former Member
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Hi Gurus,

My client will give the advances to vendors and they will deduct in instalment basis.

The problem is at the time of advance payment tds is deducted at 2% Now the currrent rate is 3%.

I changed the tax code in vendor master and posted invoices, Whenever i am going to clear the invoice it is given error Withholding tax incosistancy.

I execueted RFwt010 program Now i am able to adjust the advance.

But it is not allowing to reverse the TDS.

Regards,

Prasad.

Accepted Solutions (0)

Answers (3)

Answers (3)

Former Member
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Dear Prasad,

Have you maintain tax type for payment posting ( Choose radio Button -> Central Inv Prop).

Abt your Scenario ->

1) You made down payment at 2% TDS(Down payment Made 10000)

2) You post invoice @ 3 % TDS (Inv. Amt 20000)

3) You can deduct TDS on remaining amt i.e 10000(In WHT base amt) or u can deduct TDS on whole amt

4) During Payment down mpayment entry will automatically knock off .

msshihab1987
Active Contributor
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HI Friend

I do agree with prasad

its not a matter what you have charged at the time of advance , you have to charge the 3% tax for the whole invoice , at the time of balance payment the entry will be reversed. For that you have to clear this open item with the advance paid

narasimhulu_konnipati
Active Contributor
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Have you checked the option "Cent. Inv. Prop" ticked in Tax type.

Check this, if you have not done, do this and test. Go by [path SPRO

Thanks

Former Member
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hi

if you feel TDS is wrong. Reverse the document first and do the master data changes and do the correct transations with correct withholding tax.

Former Member
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Hi Guru,

Advance is given in the year 2010 March. They deducted 2%.

Now the TDS Rate is 3%, .

The problem is They given Advance Of 10 lakhs by deducting TDS 2% Net Amount paid to vendor is 980000.

Every Month They are deducting 1 lakh. By adjusting the advance through residual payment.

Every month it has to reverse the TDS 2000 because TDs is already deducted and paid to the govt.

Upto last month it is reversing correctly. Whenever changed the TAx code in vendor master it is given error withholding tax incosistency. Then we executed the Program RFWT0010. fROM THAT DAY ONWARDS IT IS NOT REVERSING THE tds bECAUSE PREVIOUSLY WE DEDUCTED AT 2% nOW IN THE VENDOR mASTER IS 3%.

Please suggest me what to do in this case.

Regards,

Prasad.