TAX DEDUCTED AT SOURCE USER GUIDE

1. DEFINE WITHHOLDING TAX KEYS

Go to the following Path: SPRO IMG Financial Accounting (New) Financial Accounting Global
Setting (New) Withholding Tax Extended Withholding Tax Basic Settings Define Withholding
Tax Keys
Give the Country Key IN
Click on New Entries button
Give Off. Key: 194J

Name: Prof/Technical Services

Click on Save button

2. DEFINE WITHHOLDING TAX TYPE FOR INVOICE POSTING

Go to the following Path: SPRO IMG Financial Accounting (New) Financial Accounting Global
Setting (New) Withholding Tax Extended Withholding Tax Calculation Withholding Tax Type
Define withholding tax type for invoice posting
Give the Country Key IN
Click on New Entries button
Enter the required details:
Withholding Tax type: VG
Description: Sec: 194J Professional Services
Select Net amount Radio button
Select Round w/tax amt up Radio button
Select only No cert. numbering Check box

Click on Save button

3. DEFINE WITHHOLDING TAX CODES

Go to the following Path: SPRO IMG Financial Accounting (New) Financial Accounting Global
Setting (New) Withholding Tax Extended Withholding Tax Calculation Withholding Tax Code
Define Withholding Tax codes
Give the Country Key IN
Click on New Entries button
Enter the required details:
Withholding Tax type: VG
Withholding Tax Code: VK
Description: Sec 194J: Professional Services 4.10%
Select Off. W/Tax Key 194J from drop down list
Percentage subject to Tax: 100.00%
Post. Indic.: 1
Withholding Tax Rate: 4.10%

Click on Save button

4. ASSIGN WITHHOLDING TAX TO COMPANY CODES

Go to the following Path: SPRO IMG Financial Accounting (New) Financial Accounting Global
Setting (New) Withholding Tax Extended Withholding Tax Company Code Assign withholding
tax to company codes
Click on New Entries button
Give the Company Code
Withholding tax Type
Select Withholding Tax Agent Check box
Specify the Validity Period

Click on Save button

5. ACTIVATE EXTENTED WITHHOLDING TAX

Go to the following Path: SPRO IMG Financial Accounting (New) Financial Accounting Global
Setting (New) Withholding Tax Extended Withholding Tax Company Code Activate Extended
Withholding Tax
Click on Position Button
Enter the Company Code & Press Enter
Select the Extended Withholding Check box

Click on Save button

6. DEFINE ACCOUNTS FOR WITHHOLDING TAX TO BE PAID OVER

Go to the following Path: SPRO IMG Financial Accounting (New) Financial Accounting Global
Setting (New) Withholding Tax Extended Withholding Tax Posting Accounts for Withholding
Tax Define Accounts for Withholding Tax to be paid over
Give the Chart of Accounts & Press Enter
Click on Posting Keys
Give Debit: 40 & Credit: 50
Click on Accounts
Assign the GL Account for VK

Click on Save button

7. Assign Withholding Tax Types in Vendor Master Record

8. Post Vendor Invoice (FB60)