WITH HOLDING TAX (TDS
TDS: Tax deducted at source on Vendors/ Contractors/Local and professional charges
TCS: Tax collected at source –on Customers/ scrap sale /waste sale
TDS is part of CIN (Country India Version)
TDS two types
Classic with holding Tax
|
Extended withholding tax
|
Up to 4.6 C SAP CIN from 4.7 EE on words CIN is part of SAP
|
|
SAP was released in India 1995 –SA and CIN
|
|
February 1996 Finance Budget Govt. made changes to TDS for the changes in Budget.
|
|
SAP releases –Patch (program)
|
|
February 1997 finance budget changes
|
|
February 1998 Finance budget changes
|
|
February 1991 Finance budget changes
|
|
|
Released extended with holding tax
|
|
Original CIN program modified with the budget changes
|
|
Number changes
|
|
A) Education cess
|
|
B) Higher and Secondary Education cess
|
|
C) Return –Contractors –annual Return –form 26C
|
|
D) Changed to annual return Form 26
|
|
E) Changed to quarterly return –Form 26Q
|
|
F) ETDS
|
|
TDS on contractors/Professional charges /Rent/Interest other than salaries
|
TDS on contractors (Income Tax Section 194C)
1
|
Status –Company /Partnership firm
|
Individual
|
2.
|
TDS Rates
|
|
|
Basic 2%
Surcharges 10% on 2%
ED 3% on (basic +Surcharges )
|
10% on 2% contract value in the whole year exceed 10 Lakhs other wise NIL
3% on Basic +Surcharge
(Note :contract value in the whole year exceeds 1 core other wise NIL)
|
- TDS is to be deducted at the time of invoice posting or advance payment posting whichever is earlier
- If each contract value is less than 20000 and all contract value in the whole year is less than 50000 –No TDS is to be deducted.
- To create only one code for invoice postings and one code for advance postings (Max codes can be created 99)
- If the contractor does not have taxable income he for lower rate of deduction or NIL rate of deduction . Company has to deduct at lower rate or Nil rate –Exemption certificate will be given by Income Tax Dept for each year.
- In the bill amount includes material cost and conversion charges – (composite contacts) To deduct TDS only conversion charges.
- TDS deducted should be deposited within 7 days from the month end incase of year end credits TDS to deposit within 2 months from the year end.
If 7th day comes on public holiday –choice to make the payment day before or after.
- Issue TDS certificate in form 16A to the contractor –It can be a monthly certificate or consolidated certificate for the whole year.
- File quarterly return in form 26Q earlier annual return Form 26
- Permanent Account Number (PAN) will be allotted at company code level where as Tax Deduction at Source (TDS No./TAN can be obtained at company code level/Business area level/Business places level.
Maintain calendar
Path :SPRO-SAP Net weaver –General settings –Maintain calendar
Select public holidays radio button
Select change button
Select create button
Select with fixed date radio button
Select create button
Day :1
Month :select 05 May day
Short holiday name :May day
Long holiday name :May day
Enter
Ignore the message select Yes button
Ignore the message press enter
Select back arrow
Select holiday calendar radio button
Select change button
Select create button
Calendar ID :A1 (AML HYD Factory Holiday calendar)
Select assign holiday button
Select May day check box
Select assign public holiday button
Save
Ignore the message press enter
Select back arrow two times
Select factory calendar radio button
Select change button
Select create button
Factory calendar ID :A2
Description :AML HYD Factory calendar
Holiday calendar ID :A1
Work days select Monday to Saturday check boxes
Save
Ignore the message press enter
Check withholding tax countries
Path :SPRO-Financial Accounting –Financial accounting global settings-With holding tax-Extended withholding tax-basic settings-Check with holding tax countries
Select new entries button
Country :IN
Withholding tax country :IN
Description :India
Select save button or Ctrl+S
Save in account payable customization request
Define withholding tax keys
Same path
Give the country key :In for India
Enter
Select new entries button
Official withholding tax :194C
Name :TDS contractors
Save
Press enter to save in your request
Define Business places (section code )
Path :Up to extend with holding tax the path is same -Basic settings à India à Define business places
Select new entries
Company code :AML
Section code :AMLF
Name :AML HYD factory
Save
Give the name :AML HYD Factory
Press enter to save in your request
Assign factory calendars to section code (Business places)
Same path
Select new entries button
Company code :AML
Section code :AMLF
Factory calendar ID :A2
Rule :select day before
Save
Press enter to save in your request
Define business place
Path: Form the menu select System –Services –Table maintenance –Extended table maintenance (Tr cod is SM30)
Table/view :J_1BBRANCV
Select maintain button
Give the company code :AML
Enter
Select new entries button
Business place :AMLF
Description :AML Hyderabad factory
Save
Give the name :AML Hyd factory
Press enter to save in your request
Assign section code to business place (Tr code is SM30)
Table /View :V_seccode
Select maintain button
Give the company code :AML
Enter
For section code :AMLF
Business place :AMF
Save
Press enter to save in your request
Define withholding tax type for Invoice posing:
Path: Up to Extended with holding tax the path is same –Calculation –With holding tax type –Define with holding tax type for invoice posing
Give the country key :IN
Enter
Select new entries button
With holding tax type :D1
Description :section sec 194C contractors Invoice posting
Select gross amount radio button
Select with holding tax commercial rounding radio button
Select post with hold tax amount check box
Select no accumulation radio button
Save
Press enter to save in your request
Define withholding tax for payment posing
Same path
Give the country key :IN
Enter
Select new entries button
With holding tax type :DA
Description :Sec 194 C contractors –Advance posting
Select gross amount radio button
Select withhold tax commercial rounding radio button
Select no accumulation radio button
Select post with holding tax amount check box
Select central invoice propitiate radio button
Select save button or Ctrl+S
Press enter to save in your request
Why to select central invoice proportionate for advance payments
2.266%
1. Advance payment F-48 20.11.2008
Party special GL (A) Dr 100000
To Bank 97734
To TDS (To deposit before 07.12.2008) 2266
2. Purchase invoice posting F-43 14.12.2008
Conversion charges Dr 300000
To party 293202
To TDS (to Deposit before 07.12.2009) 6798
1. Transfer of advance from special GL to normal by clearing special GL -54 14.12.2008
Party Dr 97734
TDS Dr 2266 auto debit
To Party special GL (A) 100000
TDS payable on 07.12.2008 on 07.12.2008 2266
TDS payable on 07.12.2009 4532
(6798-2266)
Define withholding tax codes
Path :Up to extend with holding tax the pat is same –Calculation à With hold tax codes à Define with holding tax codes
Give the country key :IN
Enter
Select new entries button
With holding tax type :D1
With hold code :D1
Description :section 194C contractors Invoice (2.266%)
Official with holding tax :section 194 C
Base amount percentage subject to tax :100
With holding tax rate :2.266%
Posing indicator :selection 1 (standard posting :Bank /Vendor /Customer line item reduced
Save
Press enter to save in your request
Select back arrow
Select with holding tax type :D1
Select copy as button
Change with holding tax type :D1 to DA
Change with hold tax code :from D1 to DA
Description :sec 194 C (contractors –Advance 2.266% )
Enter and Save
Check recipient type
Path :Up to extended with hold tax the path is same –Basic settings –Check recipient types
Give the country key :In for India
Enter
Select new entries button
With holding tax type :D1
Recipient type :CO
Text :company
One more
With holding tax type :DA
Recipient type :CO
Text :Company
Save
Press enter to save in your request
Maintain tax due dates
Path :Up to extend with holding tax the path is same –Basic settings –India à Maintain tax due dates
Select new entries button
Country :IN
Official with holding tax key :194C
Recipient type :CO
No.of days unit tax due date :777
Save
Assign withhold tax types to company code
Path :Up to Extend with holding tax the path is same –company code à Assign with holding tax types to company code
Select new entries button
Company code :AML
Withholding tax type :D1
Recipient type :CO
Select with hold tax agent check box
Withholding tax obligated firm :01.04.2008
Obligated to with hold tax until :31.03.2009
Save
Press enter to save in your request
Select back arrow
Select company code AML with tax type D1
Select copy as button
Change the With holding tax type to DA
Enter & Save
Activate extended withholding tax :
Same path
Select position button
Give the company code :AML
Enter
For company code AML select extended with holding tax check box
Save
Ignore the warning message press enter
Press enter to save in your request
Combined with holding tax code
Path : up to Extend with holding tax the path is same –Calculation –India –surcharges –Maintain surcharge rates (Surcharges combined with basic withholding tax codes)
Select new entries button
Company code :AML
Withholding tax code :D1
Recipient type :CO
Surcharge rate :10
Company code :AML
Withholding tax code :DA
Recipient type :CO
Surcharge :10
Save
Press enter to save in your request
Creation of 2 GL masters (FS00)
- Conversion charges under manufacturing group
- TDS on contractors under Current Liabilities & Provision group
FS00
Give the GL A/c No. :400200
Company code :AML
Select with template button
Give the GL A/c :400100 Salaries A/c
Company code :AML
Enter
Change the A/c group to manufacturing expenses
Change short text and GL A/c long text to Conversion changes
Save
One more
Give the GL Account no. :100510
Company code :AML
Select with template button
Give the GL A/c No.100500 out standing exp.
Company code :AML
Enter
Change short text and GL account long text to TDS on Contractors
Save
Assignment of accounts for Automatic postings:
Path :Up to Extended with holding tax the path is same –Posting –Accounts for withholding tax –Define accounts for withholding tax to paid over
Give the Chart of Accounts :AML
Enter
Select with holding tax code check box
And with withholding tax type check box
Save
Withholding tax type :D1
Withholding tax code :D1
Account :100510
Withholding tax type :DA
Withholding tax code :DA
Account :100510
Save
Press enter to save in your request
Maintain company code settings
Path :SPRO-Logistic- General –Tax on goods movement –India –Basic settings –Maintain company code settings
Select new entries button
Give the company code AML and Save
Press enter to save in your request
Specify document type for remittance challans
Remittance challans TDS on contractors
1 CO 1000 (Company)
2 OT 2000 (Individual)
3 CO 3000
4 CO 4000
5 TO 5000
When we make TDS payment –we have to prepare two challans
1 for Companies
2 for Individuals
In remittance challan screen
recipient type Company (CO)
1 CO 1000
3 CO 3000
4 CO 4000
TDS on contractors Dr-With Clg 8000 GL
To Bank 8000 GL
Doc .Type :SA
Path :Up to Extended with holding tax the path is same –Posting –India –Remittance challans –Document types –Specify document type (Accounts payable)
Select new entries button
Company code :AML
Remittance challan document type :SA
Save
Press enter to save in your request
Maintain number groups:
Same path
Select new entries button
Company code :AML
Section code :AMLF
Official withholding tax key :194C
Number group :08
Save
Press enter to save in your request
Assign number ranges to Number groups: ( Tr code is J1INO)
Same path
Select new entries button
Internal number range group :08
Internal challan :08
Save
Maintain number ranges:(Tr code is J1INUMBER)
Same path
Select maintain groups button
Select group without tax having 08 check box
From the menu select Interval à Maintain
Give the company code :AML
Enter
Select interval button
Year :2008
From no. :1
To number :100000
Enter & Save
Ignore the message press enter
Assign remittance challan number group to Business place
Tr code is (SM30)
Give the Table /View :J_1IEWTNUMGR
Select maintain button
Select new entries button
Company code :AML
Business place :AMLF
Official with holding :194C Tax key
Number group :08
Save
Assign remittance challan number group to section code :(SM30)
Table /view :J_1IEWTNUMGR_1
Select maintain button
Select new entries button
Company code :AML
Selection code :AMLF
Official withholding :194C Tax key
Number group :08
Save
Press enter to save in your request
Maintain number groups and SAP script forms
Path :Up to Extend with holding tax the path is same –Postings –India –Withholding tax certificates for Vendors and Customers –Maintain number groups as SAP script forms
Select new entries button
Company code :AML
Section code :AMLF
Official withholding tax key :194C
Form :J_11EWT_CERT
No group :09
Save
Press enter to save in your request
Assign number ranges to number groups
Same path
Select new entries button
Number group :09
Internal number range :09
Save
Press enter to save in your request
Maintain number ranges
Sam path
Select maintain groups button
Select group without text having 09 check box
From the menu select interval maintain
Company code :AML
Enter
Select interval button
Year :2008
From number :100001
To number :200000
Enter & Save
Ignore the message press enter
Assign withholding tax code in Vendor master
Path :Accounting –Financial accounting –Accounts payable –Master records-Maintain centrally –change (Tr code is XK02)
Give the vendor no. :4200001
Company code :AML
Select with hold tax check box
Enter
Give the withhold tax country :IN (India)
With holding tax type :D1
Withholding tax code :D1
Select liable check box
Recipient type :CO
Withholding tax type :DA
Withholding tax code :DA
Select liable check box
Recipient type :CO
Select CIN details button
Ignore the warning message press enter
Select withholding tax tab
Give the PAN of vendor :AP4C12345C
Select back arrow
Save
END USER AREA
Conversion charges posting (F-43)
Document type :Today’s date
Type :KR
Company code :AML
Posting key :31
Account no. :4200001
Enter
Give the amount :100000
Business area :AMLH
Business place /section code :select AMLF
Enter
Text :Conversion charges posting
Posting key :40
Account :400200 conversion charges account
Enter
Conversion charges
Option 1
|
Option 2
|
Option 3
|
If the bill value is less than 20000 and whole year contract value is less than 50000
|
If the value consists of material 30000 and conversion charges 70000
|
If the bill amount is only for conversion charges
|
No TDS
|
A) For D1 with –holding tax base amount enter 70000 TDS will be deducted on 70000
|
A) Remove DA
|
Remove D1 and DA
|
B) Remove DA
|
|
Remove with hold tax code :DA
Enter
Amount :*
Business area :AMLH
Text :+
From the menu select Document à Simulate and Save
Note : If you get a error message once check it Activate extended withholding tax / Document splitting
Create remittance challan
Path :Accounting –Financial accounting –Accounts payable –With holding tax –India –Extended with holding tax –Remittance of withholding tax-Create remittance challan (Tr code is J1INCHLN)
Company code :AML
Fiscal year :2008
Business plane/ Second code :AMLF
Posting date :01.01.2009 to 31.01.2009
Section :194 C
Recipient type :CO
Document date :07.02.2009
Posting date :07.02.2009
Bank account :200105 SBI CA
Execute (F8)
Enter
Business area :AMLH
Text :Conversion charges amount
Double click on all open items (by default one rupee can not see in SAP zero)
Select document overview button
Double click on the line item
SBI current A/c with one rupee
Amount :*
Save
Select clearing document button
Select back arrow
Enter Bank challan
Path: Same path ( Tr code is J1INBANK)
Give the company code :AML
Fiscal year :2008
Challan clearing number :select document no.37
(Once we select challan clearing number, Internal challan number and internal challan date will be update automatically)
Base challan no . :789
Bank challan date :07.02.2009
Bank key :select SBI
Execute
Print TDS Certificate
Path :Up to extend with holding tax the path is same –Certificates –Print (J1INCERT)
Company code ;AML
Fiscal year :2008
Business area /Section code :AMLF
Section :194C
Posting dates :01.04.2008 to 31.03.2009
Bank challan dates :01.05.2008 to 30.04.2009
Certificate date :30.04.2009
Signatory :Mr X
Designation :Manager
Place of printing :Hyderabad
Execute
Select print button
Output device :LP01
Select print button
To view the print out
From the menu select –System –Services –Output control
Select execute button
Select spool no.check box
Select display contents button
Quarterly return
( Tr code J1INQEFILE)
Path for Entering acknowledgement numbers.
In TDS certificate we have to specify acknowledgment number for each quarterly return field.
Path :System –Service –Table maintenance –Extended table maintenance (Tr code is SM30)
Table /View J_1IET_ACKN_N
Select maintain button
Select new entries button
Company code :AML
Year :2008
Section code :AMLF
Period :select second quarter
ACK No. :123
Save
Note: Quarterly return not working in pirated software’s patches updated in genuine SAP software
Advance posting:
- Advance payment posting F-48
15.12.200850000 1133 TDS to deposit before 07.01.2009
- Conversion charges posting F-43
02.01.2009 200000 4532
3. Transfer of advance from special GL to normal by clearing special GL F-54
02.01.2009 1133 Auto debit will come before 07.02.2009 to deposit 4532-1133=3399
