Title:

Withholding tax configuration and end users document. Purpose: This document briefly explains the configuration process and, the end-users transactions with respect to TD and generation of TD certificate.

!ssumptions:
This document has been prepared on the following assumptions: ". #nly TD on contractors payment considered. $. $% basic TD ta&en in to account. '. TD threshold limit: (s)*,*** +annual, -. .ducation cess $% of basic TD as said in +$, ). /igher education cess "% of basic TD as said in +$, 0. urcharge threshold limit: (s",**,**,***.** +annual, 1. urcharge rate is *.$% of the in2oice amount 3. .ducation cess and higher education cess on surcharge considered as specified in point - and ).

/ow this document is arranged:

This document has $ parts4 part " explains about the configuration and endusers transaction with respect to TD and, part $ tal&s about the configuration and end-users transaction relating to TD certificate printing.

Part 1 (TDS Configuration) 5aintain withholding tax countries: Path:-

5aintain withholding tax countries: 6alues:-

Step 2:- Define Withholding Tax Keys

758 9inancial !ccounting 9inancial !ccounting 8lobal ettings Withholding Tax .xtended Withholding Tax :asic ettings Define Withholding Tax ;eys

/ere we configure the 2arious tax &eys which are applicable in different scenarios. For example:Withholding tax code on <ontractors -"=-< Withholding tax code on (ent -"=-7 Withholding tax code on <ommission and bro&erage > "=-/ Withholding tax code on Professional ? Technical ser2ice > "=- @

5aintain withholding tax type:- Path

5aintain withholding tax type:- 6alues 0 tax types maintained as gi2en under:

9eatures of respecti2e tax types i.e. T", T$, T', T-, T-, T), T0 9eatures of T" +used for basic TD ,: This is based on in2oice amount Threshold limit:)*,*** and accumulation starts from !pril.

9eatures of T$: This is based on T".

9eatures of T': This is based on T"

9eatures of T" +used for basic TD ,: This is based on in2oice amount

Threshold limit:",**,**,*** and accumulation starts from !pril.

9eatures of T): This is based on T-

9eatures of T0: This is based on T-

Define tax code: Path:-

Define tax code: 6alues:0 tax codes maintained as gi2en under:

T" ? <" calculates tax A $% on in2oice amount and, TD is deducted when the in2oice amount exceeds (s)*, ***B-.

T$ ? <" calculates tax A $% on T" ? <".

T' ? <" calculates tax A "% on T" ? <".

T- ? <" calculates TD A *.$% on in2oice 2alue and, deducts TD when the in2oice amount exceeds (s", **, **,***B-.

T) ? <" calculates tax A $% on T- ? <".

T0 ? <" calculates tax A "% on T- ? <".

Portray dependencies between withholding tax types: +7n this acti2ity we define that the base for T$ ? T$ is T" and, the base for T) ? T0 is T-,

Dependency for T":

Dependency for T$

Dependency for T'

Dependency for T-

Dependency for T)

Dependency for T0

Define 5inB5ax !mounts for Withholding Tax <odes: Path:This setting defines the threshold for )*,*** and ",**,**,***

Threshold for TD to deducted for the "st time.

Threshold for urcharge to deducted for the "st time.

!ssign Withholding Tax Types to <ompany <odes: Path:-

!ssign Withholding Tax Types to <ompany <odes: 6alue for T":-

6alue for T$

6alue for T'

6alue for T-

6alue for T)

6alue for T0

!cti2ate .xtended Withholding Tax: Path:-

Define !ccounts for Withholding Tax to be Paid #2er: Path:-

!ssign the reCuired 8D accounts at <o! le2el

Check Recipient Types

758 9inancial !ccounting 9inancial !ccounting 8lobal ettings Withholding Tax.xtended Withholding Tax :asic ettings <hec& (ecipient Types

This is reCuired to categoriEe the 2endor. 9or example:-

7f the 2endor is a company or, #ther than a company.

Select the country Key.

Click on New Entries.

Click on save Button.

!ssign tax type and tax code in 2endor master

Part 1 (TDS- End-user transactions) Test posting an in2oice for (s-=, ***B-. .xpected action: ". The system should only be posting the full amount of (s-=, ***B- in the 6endors ledger without deducting any TD amount. The reason for nondeduction is4 we ha2e set the deduction threshold at (s)*, ***B$. 5ust &eep a trac& of this in2oice for deduction of TD and urcharge once the accumulated amount exceeds the threshold limits.

Test posting an in2oice for (s)",***B-. .xpected actions: ". The system must deduct TD A )",*** F -=,*** i.e. (s$,***B$. ystem must deduct education cess A $% on (s$,***B'. ystem must deduct higher education cess A "% on (s$,***B-. 5ust &eep a trac& of this in2oice for deduction of urcharge once the accumulated amount exceeds the threshold limit.

Test posting an in2oice for (s==,**,***B-. .xpected actions: ". The system must deduct TD A $% on (s==,**,***B- i.e. (s",=3,***B$. ystem must deduct education cess A $% on (s"=3,***B'. ystem must deduct higher education cess A "% on (s"=3,***B-. 5ust calculate urcharge A*.$% on -=,***F)",***F==,**,***B- i.e. (s$*,***B). ystem must deduct education cess A $% on (s$*,***B0. ystem must deduct higher education cess A "% on (s$*,***B-