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Author's profile photo Murali Raju

How to configure recent amendment for TDS 25% in INDIA

How to configure recent amendment for TDS (25%) from Government of INDIA in SAP ?

 

13th May, 2020 press release

Reduction in rate of Tax Deduction at Source (TDS) & Tax Collection at Source (TCS) In order to provide more funds at the disposal of the taxpayers for dealing with the economic situation arising out of COVID-19 pandemic, the rates of Tax Deduction at Source (TDS) for the following non-salaried specified payments made to residents has been reduced by 25% for the period from 14th May, 2020 to 31st March, 2021

 

Please find the link to get Press Release Document

 

https://www.incometaxindia.gov.in/Lists/Press%20Releases/Attachments/834/Press-Release-Reduction-in-TDS-TCS-Rates-dated-14-05-2020.pdf

 

Assumptions :-

  • Configuring in SAP system.
  • All the basis WHT is completed .

*Formula base WHT is checked

  • All the master data are set correctly in vendor master .
  1. County IN
  2. Maintain WHT code

 

To test the WHT Configuration using  program  RFWT1000 before posting  transaction .

 

Below Screen shows the posted document for the WHT code rate 10%    Cal : 25% of 10% (7.5 %)

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Example shown for

Define Withholding Tax Type for Invoice Posting

 

Additional Configuration for the amendment 

Below are the additional steps to perform for the expected results .

 

 

 

 

Posted document Display

 

 

 

Note :  same wise configure for  Define Withholding Tax Type for Payment  Posting .

There is no validity end date for TDS.consider to year-end activity .

Change Condition record in case TCS is derived from pricing procedure .

 

please reply if their are  any other ways to get the expected results 🙂

 

 

Sources

https://www.incometaxindia.gov.in/Lists/Press%20Releases/Attachments/834/Press-Release-Reduction-in-TDS-TCS-Rates-dated-14-05-2020.pdf

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      5 Comments
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      Author's profile photo Chinmay Damle
      Chinmay Damle

      Nice blog Murali but my one issue regarding this solution, tax rate not getting updated in WITH_ITEM,

      In addition, tax rates not updated in stranded report J1INEMIS

      do you have solution on this?

       

       

      Author's profile photo Murali Raju
      Murali Raju
      Blog Post Author

      Thanks for the Q’s Chinmay ?

      Kindly have a look on note number : 1695696

      Ref:

      https://wiki.scn.sap.com/wiki/display/ERPFI/New+MIS+Report++for+INDIA+-+J1INEMIS

       

      Author's profile photo Chinmay Damle
      Chinmay Damle

      country India localization, formula base method for withholding tax calculation is not supported.

      SAP Note 2930256 - J1INEMIS withholding tax report showing tax rate a zero

      Author's profile photo Shakir Shaikh
      Shakir Shaikh

      Hello all,

      Kindly refer this blog , issue with J1INEMIS report has been addressed.

      https://blogs.sap.com/2020/06/08/issue-solution-with-j1inemis-reporting-due-to-statutory-changes/

      Author's profile photo Mukesh Kumar
      Mukesh Kumar

      Hi Murali,

      I think we can use existing tax code only but need to update the exempted rate and date range in vendor master.It will help user to not change new TDS code after given date.

      TDS Vendor