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TAN Based Exemption for India Withholding tax calculation

In India, companies can define the withholding tax exemption for a vendor on the basis of the tax account deduction number (TAN). A new solution is available for India localization to calculate exemption based on the TAN number. This solution has the following features.

  • Exemption based on TAN number.
  • Accumulation on both invoice and payment time document postings
  • Exemption rate is applicable based on the threshold value.

To implement this change, choose the CIN Details pushbutton. On the resulting screen, under the TAN Exemption tab, make the following settings:

  • Enter the section code that identifies under which TAN the tax was deducted.
  • Enter the exemption certificate number and the exemption rate.
  • The exemption certificate field is mandatory.
  • Assign a period to this certificate number that identifies the duration for which the tax exemption is applicable.
  • Enter the reason for exemption from withholding tax.
  • Enter the withholding tax type and tax code.
  • Enter the threshold amount for the exemption.


  • For example, if the threshold is 100000 INR and the invoice time tax type /tax code is T1/T1 and payment time tax type/ tax code is T2/ T2 for the Section Code IN01, you may need to maintain the entries as below.

Section Code

Certificate Number

Exemption Rate

Exempt From

Exempt To

Exempt. Reason

Wtax Type

Wtax Code

Exem. Threshold


















  • Multiple entries can be maintained for a single TAN number; but the “Exempt From” date should be different and the system will consider the latest exemption for calculation.
  • The standard accumulation should be deactivated.

Once the exemption details are maintained, you may need to maintain the “link” between invoice time tax type and payment time tax type. This needs to be maintained in the view “V_FIWTIN_TDS_MAP”.

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  • Hi,

    We have the same requirement and on this i need your help.

    will you please tell me , what is the meaning of threshold limit.

    and is there any configuration for this.

    Please tell me i need on an urgent basis.

    • Hi,

      I am not sure whether my understanding is clear from your query. Let me give a try.

      The threshold limit is the amount limit given by the tax authority for each of your suppliers for tax deduction. If the total base is upto that amount, you should deduct the tax at a lower rate and if the total base amount is above the limit, the normal rate will be applicable.

      Yes, SAP system support this for India country version. You can refer the OSS Notes 1722578 & 1945137 for this. Also, you can search for "TAN Based Exemption" under the component XX-CSC-IN-FI for all the related notes for this.

      Best regards,


      • hi Vibin,

        we have this requirement...

        1. There are different Categories of vendor in which we have to give the exemption upto certain percentage (For Eg.  For a vendor TDS should be deducted at 20 % but due to exemption, we give him 90% exemption.  It means only 10% should be deducted by you and submit to the government).

        2. There are certain vendors in which we have to give exemption upto certain percentage but it should not be above than certain  amount limit (For Eg. For a vendor TDS should be deducted at 20 %, but due to vendor having exemption upto 100000 Rs. System should not deduct the amount upto 100000 TDS,  after this it should deduct at normal percentage.)

        3. There are certain Vendors in which we have to give exemption until they have business Transaction with us upto 100000 (For Eg. One vendor is having business with us and he has ordered three times for Rs. 30000 each, but the TDS should not be deducted until he has business with us till 100000 Rs.  After 100000 Rs. System will deduct from normal percentage)
        • Hi,

          All the scenarios which you mentioned above is taken care by the standard exemption (no linking between invoice time and payment time) and TAN exemption solutions. For TAN Exemption, we specifically check the total amount for the Invoice time and payment time taxes. Is it not related to TAN Number based exemption?

          Kindly provide your contact information, we can definitely discuss on that. Before that, you may please go through the attachments given in the notes which I provided earlier.

          Best regards,


          • Vibin,

            We have already implemented the SAP notes as well as the correction which has been given in this note.

            The only point which i need to understand is from the user point of view.

            the three points which i have discussed with you, is what client need and I am unable to find out how to do this.

            I have got the TAN based exemption tab as well in CIN details.

  • Hi, Vibin

    we have implemented 1945137 and all fields above are in our CIN tab, we have also mapped Invoice tax code and payment tax code in V_FIWTIN_TDS_MAP.

    we are mapping as below.

    IN     H1     H4     H2     H4

    than assign TDS in Withholding Tax TAB with out exemption.

    than maintain exemption in CIN TAB Tan Exemption

    S Code     C Number         E Rate     E from               E to               Reason  T type    T Code     Amount

    2110          0213SB534D      50          01.01.2014     31.03.2014     EX          H1          H4          10000  

    I can not fill for payment tax type because of same section code.   

    But when we post through FB60 for more than thresh hold limit, system is not removing exemption, can you please guide me about this.

    • Hi Vivek,

      I have rechecked the customizing in our internal system and I could add the second record in the "CIN Details" tab.

      For the issue of not considering the exemption, I would request you to raise an OSS message to the component XX-CSC-IN-FI.

      Best regards,


  • Hi Vibin Sir,

    Good Afternoon!!!

    We are having same requirement from client, but issues is we have 3/4 Vendors with PAN number. So once I put same PAN Number for 4 different Vendors will it work? I mean Treshhold amount should get calculated on comman PAN number.


    Ajit K

    • Dear Ajit,

      Sorry for the delay. As per the design of our solution, the system calculates the threshold based on the vendor number (LIFNR) and not PAN number. So in your case, it will consder as 3 - 4 different vendors only.

      Best regards,


  • Hi all,

    i have one query pls help me ,  our client want to use multiple tax exemption one withholding tax type , how we can use , this impact on any  TDS report , theses exemption certificate number want print any tds report (for e.g , challan , tds Certificate or ) , pls explain me what is process , how it can be use one withholding type ,, pls help me urgent.

    Thanks & Regards

    Jay ,

    • Hi Jay,

      I am little afraid whether your scenario is a valid scenario.

      As per my understanding, you can have only one exemption valid at a time. The system also consider only one exemption at a time for a given tax type. I can verify with our legal team the validity of your case.

      Definitely, the exemption details will be reported in your Q-returns.

      Best regards,


      • Thanks Sir  🙂 , for valuable feedback and sharing your knowledge !!

        suppose  i want to implement oss note 1945137 , our client business scenario is , one vendor , suppose client has two exemption certificate no , he want to use two withholding tax exemption certificate , one withholding tax type , it is possible or not ,, my client want to use two tax exemption certificate one , withholding type, if i implement above note 1945137 , it possible or note , i have found one note pls check this link

        once  again i  thank you sir ,

        pls resolve my query sir  !!!!



        • Hi Jay,

          The OSS Note which you are referring is 1945137 is for TAN amount based exemption. In this case, the amount posted by invoices and advance payments will be considered for your threshold check and if the total accumulated amount is less than the threshold, your exemption rate will be applicable.

          Now coming to your issue which you are referring to.

          You have vendor VEND1 for which tax type T1 is assigned. You have multiple exemption certificate.

          1. Exemption 1 - Validity : 01.01.2014 - 31.12.2014

          2. Exemption 2: Validity : 01.07.2014 - 28.02.2015

          You can maintain both the exemptions. but, the system will consider only the latest exemption certificate and its exemption percentage for tax calculation. This means, at a time, only one exemption will be considered for the calculation even though you can maintain multiple exemption certificate in the system.

          I hope, I could clarify your query.

          Best regards,


          • Thanks for reply sir  🙂 🙂

            I Understand uses of oss note  1945137,   but I have one more query  , suppose I want create  one  vendor master , I maintain  below  two withholding tax  exemption Certificate number , one withholding  type  T1

            1. 1.Exemption 1 - Validity : 01.01.2014 - 31.12.2014      Exemption %  is 10
            2. 2. Exemption 2: Validity : 01.07.2014 - 28.02.2015       Exemption %  is 5

            And  I am making invoice dated on 01.09.2014 , what  %  take TDS at the of invoice  ( 5 or 10 ) , And  any  govt  rules for TDS exemption , how many time we get TDS Exemption in year , what is process,  my imp question is we can use two tds exemption certificate   one withholding tax type or not.,, if you have any document  tds exemption pls share with me sir ,

            Thanks for  your valuable feedback

            Thanks & Regards

            Ajay pal

          • Hi Ajay,

            I think, I was clear with my previous reply. Please refer "latest exemption certificate". This means, only one at a time.

            Best regards,


          • Hi vibin sir,

            we have facing problem while implementing OSS note  1945137 in this note  include one  Badi , while implementing Baid ,we getting error "Paremeters/Exception os inherited methods or event cannot be changed". , Please help me what  is process of above note implementation or above related any other note ? , how we can implement note . send us all the process of note implementation.

            Thanks & Regards


  • Hi Vibin sir,

    I have one query , vendor master in cin tab , suppose i am not issuing exem threshold field (Amount), its possibel to run scenario without using threshold field .because we don't have any threshold amount.



    • Hi Jay,

      I am afraid, whether I understood your requirement correctly.

      It will not work without an amount. If your purpose is to calculate the reduced rate at Section Code level, I would suggest you maintain a huge amount as threshold and use it.

      If you just need to calculate the tax at a reduced rate, use the standard exemption functionality.

  • Thanks vibin sir for reply ,, 🙂

    We have implemented OSS Note no 1945137 for amount based tan level exemption for india. and assign withholding tax country IN , at time of vendor  invoice posting tcode fb60 , we have getting dump " The feild " I secco " cannot be changed "  this dump getting only indian vendor ( IN country india vendor)  &  withholding tax country IN only and if both the same that time getting dump only , please help me sir urgent. find the below dumptcode fb60 dump.png



    tcode fb60 dump.png
  • There is issue of TDS settings for TAN exemption limits, the settings I have attached herewith for your reference.

    1. I have created two WHT types.

    2. One is for Invoice level deduction and another one for at advance Payment time deduction.

    3. And also two WHT Conditions against each WHT types.

    4. I have assigned Both WHT types in vendor master.

    5. And assigned only WHT condition for invoice type as it is to be deducted by-default at the time of invoice.

    6. At the time of payment it is optional for users, to put it at the time of advance payment and not made by-default deduction at the time of payment against invoice.

    7.I have implemented new patch for getting TAN Based value dependent TDS exemption.

    8. I am testing on a vendor with the TAN based values and exemption percentage in the vendor master in Development server.

    9. The system is deducting the exempted TDS values upto the values mentioned the master while posting invoices.

    10. But at the time of advance payment it is not deducting as per the exemption, but deducting full TDS.

    11. I am able to assign for invoice level WHT types but unable to assign for the payment level WHT types as I have not assigned the WHT condition in master as mentioned above in point no.6.

    Please suggest regarding.


  • Hi Vibin ,

    As per above example  threshold limit Rs 1,00,000, if we are posting vendor invoice more  Rs 1,00,000.   more then threshold limit , so system is calculate full base withholding tax ,

    for eg

    withholding tax % -10%

    Threshold limit - Rs 100,000.

    maintained exemption also ,

    If we post vendor invoice more then Rs.100,000. for Eg. 15,00,000. then system calculate on 15,00,000. withholding tax why? instead of Rs 500,000. any SAP Standared ? tab based exemption functionality



  • Hi Vibin,

    We have been struggling for long with the lower deduction of taxes.

    Please advise whether the WHT Exemption limit (say Rs. 1000.00) should get exhausted when the invoices (Rs. 1000.00) are in parked status (MIR7)?

    The reason for asking this is WHT exemption limit is consumed when the invoices are parked and upon posting the parked invoices (MIR6) WHT is getting calculated incorrectly.

    If the answer to the above q is no, then what could be the set ups or configs that needs to be checked to correct this issue.