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Withholding tax Minimum base amount Vs Exemption Threshold in TAN Exemption for India/CIN

pandu_bad
Participant
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Dear Experts,

Can you please share some knowledge on below 3 fields, in case of TAN based withholding tax Exemption (India) is activated for Vendor ...

  1. Minimum Base amount in Withholding tax code : I understand this, in standard if the base amount corssing to the amount entered system will calculate WHT for entire amount
  • Vendor master data : CIN details -> TAN Exemption Tab :

2.Exem Rate?

3.Exem Threshold?

I have read list of blogs in SCN and also OSS notes on TAN based exemption process, but still missing how does above fields work

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Answers (1)

Lakshmipathi
Active Contributor
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Please search in Google with the text "TAN based withholding tax+cin+sap", so that you will find a very first document is a Wiki explains about the fields you wanted to know.

pandu_bad
Participant
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Dear lakshmipathi.ganesan, Thanks for the recommendation, unfortunately the explanation was not complete in the wiki!

After doing some analysis with couple of Vendors and test-transactions,

My understanding so far :

  1. If minimum base amount is maintained for WHTax code, then the Invoice/Payment should meet this requirement at first for system to calculate WHTax
  2. In case Ven Master - CIN - TAN Exemption tab has updated with Threshold amount - and the transaction falls within the limit - No WHT calculated (bassed on Exemption rate, if exem rate is 100% for a given threshold value then there will be no WHTax);
  • Here is the catch (ofcourse, may be for me atleast!)... for TAN based accumulation, system will accumulate amounts even if the base amount is less than the amount entered @WHTax code level :- Just to put it in a standard comments, this is the same as acccumulation at Withholding tax type!
  • Though the Threshold Amount (after Accumulation of Inv/Payments) is crossed, and if the new Invoice/Payment minimum base amount criteria is not met, then system will not calculate WHTax
  • To summarize : Till the accumulation/threshold limit above 1&2 are valid, after the threshold crossed point 1 should met!

However, referring to India (TAN) requirements I would prefer to read from forum on the correct usage of these 3 fields, it would be very interesting to hear your comments as well