With holding tax (TDS)
Classic Extended
Classic: SAP Introduced in India 1995
1996, 97, 98,99,2000 if there is any changes the company will provide program called patches or hot packs
Extended:Instead of patches/hot Packs Company provides original program with additional program (Because patches are more than original program)
TDS is applicable other than salaries
Contacts - 194C
Professional charges – 194J
Rent – 194I
TCS – Scrap sales/waste sales ( to collect at source)
In India TDS is introduced in DEC.2003
In Interim budget – introduced education cess-2%
Previous Present
Contractors 26 L 26
Rent 26 I 26
Professional Charges 26 J 26
Sec 194c – TDS on contractors:
a)Recipient à The person who is receiving money – It may be company, partnership firm or others
Company/firm others
b)TDS 2% of basic 2% of basic
Surcharge 10% of Basic TDS 10% of basic TDS, if the value
Exceeds 10 lakhs in a year
Educational Cess 2% 2%
Educational cess is calculated 2% on (TDS + Surcharge)
c) Choice to use one code or number of codes – It is advised to go for No. of codes
d) TDS is to be deducted at the time of invoice posting or advance payment posting which ever is earlier.
e) If the value is less than 20000/- in the whole year –TDS need to be deducted.
f) The contractor can get exemption certification from dept for nil rate/lower rates.
g) Exemption certificate given for each year.
h) To make TDS payment with in 7 days from the close of the month
If 7 days comes on holiday, choice to pay one day before or after
i) Incase of year end credits – TDS to be paid before 31st May
j) Issue TDS certificate in form – 16A – you can issue monthly (or) consolidate certificate.
k) File annual return (Now quarterly) in form – 26
l) If the bid includes material and service changes – Deduct TDS on service charges.
Customization in SAP:
Check with hold tax countries:
Path:SPRO àFinancial Accounting à Financial Accounting Global settings àwith hold tax àExtended with holding tax à basic settings à check with hold tax countries
Select position button
Give the country – IN (India )
Enter
Define official with holding tax codes:
Same path
Give the country key: IN (India )
Enter
Select new entries button
Official key: 194C
Name: TDS on contractors
Save
Define business places:
Up to extended with hold tax the path is same, and then basic settings à India àdefine business places
Give your company code: AML
Enter
Select new entries button
Give the business place: AMLF
Description: Hyderabad factory for AML
Save
Give the name: Hyderabad factory for AML
Enter
Save in your request in accounts payable request
Maintain holiday calendar:
Path:SPRO àGeneral settings àmaintain calendar
Select public holidays radio button
Select change button
Select create button
Select with fixed date radio button
Select create button
Give the date: 26
Month: 01 (January)
Give the public holiday short text: Republic day
Holidays long text: Republic day
Select create button
Ignore the message, press enter
Select back arrow and create holiday
Select holiday calendar radio button
Select change button
Select create button
Give the calendar ID – A1
Description: Holiday calendar for AML Hyderabad factory
Select assign public holiday button
From the list select republic day check box
Select assign public holiday button
Save
Ignore the message, press enter
Select back arrow 2 times
Select factory calendar radio button
Select change button
Select create button
Give the factory calendar ID: A2
Give the description: AML Hyderabad factory calendar
Give the holiday calendar ID: A1
Select Monday to Saturday check box
Save
Ignore the message, press enter
Assign factory calendar to business places:
Path:Up to extended with holding tax the path is same. Basic settings àIndia àassign factory calendars to business places.
Select new entries button
Give the company code: AML
Business place: AMLF
Factory calendar: A2
Tax due date rule: select day before
Save
Save in your request in accounts payable
Define with hold tax type for invoice posting:
Path:Up to extended with hold tax the path is same
Calculation à with hold tax type àdefine with hold tax type for invoice posting
Give the country key: IN (India )
Enter
Select new entries button
Give the with hold tax: K1
Description: Sec 194C contractors invoice basic
Basic amount: select gross amount radio button
Select with hold tax commercial round button
Select post with hold tax button
Select no accumulation radio button
Deselect manual with hold tax check box
Save
Save in your request
Select back arrow
Select K1 (What you are created)
Select copy as button
Change with hold tax type to: K2
Description: Sec 194C – contractors invoice surcharge
Enter
Save
Select back arrow
Select K1 & K2
Select copy as button
Change with hold tax type: K3
Description: Sec 194C – contractors invoice – basic ed. Cess
Select inherent base check box
Enter
Change with hold tax type: K4
Description: Sec 194C contractors invoice – Surcharge ed. Cess
Select inherent base check box
Enter & save
Define with hold tax type for payment posting:
Same path
Give the country key: IN (India )
Enter
Select new entries button
With hold tax type: KA
Description: Sec 194C contractor’s adv. Basic
Select gross amount radio button
Select with hold tax amount check box
Select no accumulation radio button
Deselect manual with hold tax check box
Select control invoice proportionate radio button
If advance paid:
Aug: Vendor A/C Dr 100000
To Bank A/C 98000
To TDS A/C 2000
September: Conversion charges A/C Dr 300000
To Party A/C 294000
To TDS A/C 6000
Transfer to advance
TDS 2000 Debit
(The use of centrally invoice posting is if there is any TDS on advance, that will be proportionately deduct while payment (TDS) is made on invoice
Save: save in your request
Select back arrow
Select with hold tax type: KA
Select copy as button
Change with hold tax type: KB
Description: Sec 194C. Contractors advance surcharge
Enter and save
Select KA & KB
Select copy as button
Change the with hold tax type to KC
Change description to Sec 194C – contractors advance basic ed. Cess.
Select inherent basic check box
Enter
Change with hold tax type: KD
Description: sec 194C Contractors adv. Surcharge ed. Cess
Select inherent base check box
Enter and save.
Define with holding codes:
Up to extended with holding tax path is same
Calculation à with holding tax codes àdefine with holding tax codes
Give the country Key: IN (India )
Enter
Select new entries button
With hold tax type: K1
With hold tax code: K1
Official with hold tax code key: select 194C
Description: Sec 194C contractors Invoice basic
Percentage subject to tax under base amount: 100%
With hold tax: 2%
Posting indicator: select 1: standard posting: bank/vendor Customer line item reduced
Save
Save in your request
Select back arrow
Select K1
Select copy as button
Change with hold tax type: K2
Change with hold tax code: K2
Description: Sec 194C – contractor invoice surcharge
Example:Basic rate: 100000 * 2/100 = 2000
Surcharge: 10% on basic rate (or): 2000*10/1000=200 (or)
0.2% on basic amount = 100000*0.2/100=200
With hold tax rate: 0.20
Enter and save
Select K1&K2
Select copy as button
Change with hold tax type: K3
With hold tax code: K3
Description: Sec 194C contractors invoice basic ed. Cess
Press enter
Change with hold tax type: K4
Change with hold tax code: K4
Change description: Sec 194C contractors invoice surcharge ed. Cess
With hold tax rate: 2%
Enter and save
Select back arrow
Select K1, K2 , K3, &K4
Select copy as button
Change with hold tax type: KA
Change with hold tax code: KA
Change description to: Contractors adv. basic
Enter
Change with hold tax type: KB
Change with hold tax code: KB
Description: Sec 194C Contractors adv. Surcharge
Enter
Change with hold tax type: KC
Change with hold tax code: KC
Description: Sec 194C Contractors adv. Basic. Ed. Cess
Enter
Change with hold tax type: KD
Change with hold tax code: KD
Description: Sec 194C Contractors adv. Surcharge ed. Cess
Enter & save
Portray dependencies between with holding tax types:
Path:Up to extended with holding tax path is same
Calculation à with holding tax base amount àportray dependencies between with holding tax type
Give the country key: IN (India )
Enter
2% K1 45 KA 49
0.2% K2 46 KB 50
2% K3 47 KC 51
2% K4 48 KD 52
Use of the inherent base: incase of K3 &KD – Education cess is calculation on K1 & KA respective
Select with hold tax type: K3
Select details button
Dependent on type No: 45
Save
Save in your request
Select back arrow
Select K4, KC &KD
Select details button
For K4 – Dependent on type No: 46
Select new entry button
For KC – dependent on type No: 49
Select next entry button
For KD – Dependent on type No: 50
Save
Assign with holding tax types to company codes:
Path:Up to extended with holding tax the path is same.
Company code àassign with holding tax to company code
Up to extended with holding tax the path is same.
Basic setting à check recipient types
Give the country key: IN (India )
Enter
Select new entries button
Give with holding tax: K1: Recipient: Co: Text: company
With hold tax Recipient type Text
K3 - CO - Company
K4 - CO - Company
KA - CO - Company
KB - CO - Company
KC - CO - Company
KD - CO - Company
Select save button (or) (ctrl +s)
Save in your request
Maintain tax due dates:
Path:Up to extended with holding tax the path is same
Basic settings àIndia àMaintain tax due dates
Select new entries button
Give the country: IN (India )
Official with holding tax key: 194C
Recipient: Co (Company)
No. of days until tax due date: 777
And press F1 (For documentation)
Save
Assign with holding tax types to company codes:
Path:Up to extended with holding tax the path is same
Company code àAssign with holding tax types to company codes
Select new entries button
Give the company code: AML
With holding tax type: K1
Recipient type: select Co
Select with hold tax agent check box
With hold tax obligated from 01.04.2006
Obligated to with holding tax unit: 31.03.2007
Save
Save in your request
Select back arrow
Select: K1
Select: copy as button
Change with holding tax type: K2
Enter and save
Select K1 & K2
Select copy as button
With holding tax type: K3
Enter
With holding tax type: K4
Enter and save
Select back arrow
Select K1, K2 , K3 &K4
Select copy as button
Change with holding tax type to KA
Enter
Once again change with holding tax type to: KB
Enter
Change with holding tax type: KC
Enter
Change with holding tax type: KD
Enter and save
Activate extended with holding tax:
Path:Same path
Select position button
Give the company code: AML
Enter
Select extended with holding tax check box for company code: AML
Select save button (or) (ctrl + s)
Ignore the message: Press enter
Save in your request
Creation of G/L Account TDS & Contractors and conversion changes
Account:(FS00)
Give the G/L Account No: 100505
Company code: AML
Select with template button
Give the G/L Account: 100500 (Outstanding expenses)
Company code: AML
Enter
Change short text & G/L Account long text: TDS & Contractors
other fields are same
Save (or) (ctrl + s)
Give the G/L Account: 400200
Company code: AML
Select with template button
Give the G/L Account No: 400100 (Salaries A/C)
Company code: AML
Enter
Change the accounting groups to manufacturing
Change short text & G/L A/C long text to conversion charges
Other fields are same
Save (or) (ctrl + s)
Assignment accounts for automatic postings:
Up to extended with holding tax the path is same
Postings à Accounts for with holding tax àDefine accounts for with holding tax to be paid over
Give the chart of accounts: AML
Enter
Select with hold tax code check box
With hold tax type check box
Save
Give the with holding tax type with holding tax code Account
K1 K1 100505
K2 K2 100505
K3 K3 100505
K4 K4 100505
KA KA 100505
KB KB 100505
KC KC 100505
KD KD 100505
Select save button (or) (ctrl +s)
Maintain company code settings for excise:
Path:SPRO àLogistics general à Tax on goods movements à India àBasic settings àMaintain company code settings
Select new entries button
Give the company code: AML
Save
Save in your request
Maintain surcharge calculation methods:
Path:Up to extended with holding tax the path is same
Calculation àIndia àsurcharges àMaintain surcharge calculation methods
Select position button
Company code: AML
Enter
Select surcharges check box for AML
Save
Save in your request
Maintain surcharge Tax codes: (separate tax codes) : same path:
Select new entries button
Give the country: IN
With holding tax type: K2
Country With holding tax type With holding tax code
IN K2 K2
IN KB KB
Save & save in your request
Maintain surcharge rates: (Surcharges combined with basic with holding tax codes)
Same path
Select new entries button
Company with holding tax type with holding tax code recipient Surcharge
AML K1 K1 CO 10
AML KA KA CO 10
Save & save in your request
Remittance Challan: To get TDS Payable line items co separately and others separately:
Conversion changes A/C Dr
To party A/C
To TDS A/C
TDS on contractors:
Dr Cr
1- 1000 - Company
2 – 2000 - Others
3 – 3000 - Company
4 – 4000 - Company
5 – 5000 - Others
|
TDS on Company: is 8000
For companies (194C)
TDS on contractors Dr
To Bank
Specify document type for remittance challan
Up to extended with holding tax the path is same
Postings à India àRemittance challan à Document types à Specify document type (Accounts payable)
Select new entries button
Give the company code: AML
Remittance challan document type: SA
Save
Save in your request
Maintain number groups:
Same path
Select new entries button
Give the company code: AML
Business place: AMLF
Official with holding tax key: 194C
Number group: 004
Save
Assign no ranges to number groups:
Same path
Select new entries button
Number group: 004
Internal No. range: 04
Save
Maintain No. ranges:
Same path
Select maintain Groups button
Select group with out tax having 004
From the menu select interval àmaintain
Give the company code: AML
Enter
Select interval button
Year: 2006: From number:1: to number: 100000
Enter and save
Maintain number groups to TDS Certificates:
Up to extended with holding tax path is same
Postings à India à with holding tax certificates for vendors & customers à maintain number groups and SAP Script forms
Select new entries button
Give the company code: AML
Business place: AMLF
Official with holding tax key: 194C
Give the form: J_ 1IEWT _ CERT
No. group: 003
Save
Save in your request
Assign number ranges to number groups:
Same path
Select new entries button
Give the number group: 003
Internal No. range: 03
Save & save in your request
Maintain number ranger:
Same path
Select maintain groups’ button
Select group without tax having 003 check box
From the menu select interval àmaintain
Give the company code: AML
Enter
Select interval button
Year: 2006: From No: 100001 to No: 200000
Enter and save
Assign tax codes in vendor master:
Path:Accounting àFinancial accounting à accounts payable à master records àmaintain centrally à change (XK02)
Vendor No: 8700001
Company code: AML
Select with holding tax check box
Enter
With holding tax type: K1
With holding tax code: K1
Select liable check box
Recipient type: Co
With holding tax type: K2
With holding tax code: K2
Select liable check box
Recipient type: Co
With holding tax type: K3
With holding tax code: K3
Select liable check box
Recipient type: Co
With holding tax type: K4
With holding tax code: K4
Select liable check box
Recipient type: Co
With hold tax type With holding tax code Liable Receipts type
KA KA - Co
KB KB - Co
KC KC - Co
KD KD - Co
Press next page button ignore warning message
Press enter
Select CIN details button
Ignore the warning messages, press enter
Select with holding tax tab
PAN: AP99876543C
Select back arrow and save
User level:
Conversion charges posting (F-43)
Document date: 11.09.2006
Type: KR
Company code: AML
Posting key: 31
Account No: 8700001
Enter
Give the amount: 100000
Business place: AMLF
Business area: AMH
Text: conversion charges posting
Posting key: 40
Account No: 400200 (Conversion charges A/C)
Enter
1
|
2
|
3
|
If the values is less
Than 20000 in the
Whole year
|
If the bill consists of
Material 70000/-
Conversion charges
30000/-
|
If the bill is only for conversion charges
|
Remove: K1,
KA,KB,KC,KD
|
For K1,
|
Remove KA,KB,KC,KD
|
3rd Remove the codes KA, KB, KC & KD
Enter
Give the amount: ‘*’
Business area: AMH
Text: ‘+’
Document à Simulate
Double click on 3rd line item
Text: enter ‘+’
Select next item button
Text once again ‘+’
Select next item
Text: ‘+’
Select next item button
Text: ‘+’
Save
From the menu select: Document display
Double click on 3rd line item: TDS on contractors
It show the value date: 07.10.2006
Creation of remittance Challan:
Path:Accounting àFinancial accounting àAccounts payable àwith holding tax àIndia àextended with holding tax à remittance of with holding tax àcreate remittance challan
Company code: AML
Fiscal year: 2006
Business place: AMLF
Posting date: 01.09.2006 to 30.09.2006
Sec 194C
Recipient types: Co
Document date: 07.10.2006
Posting date: 07.10.2006
Bank account: 200105 (SBI Current account)
Business area: AMH
Execute
Give the text: TDS Payment for September
Select process open items button
Enter
Double click on all the items
Select document overview button
Double click on SBI Current A/C 1/-
Amount: ‘*’
Save
Select clearing document button
Enter bank challan: form 16A
Same path:
Give the company code: AML
Fiscal year: 2006
Challan clearing number: select 27
Internal challan No & challan date will come automatically
Bank challan No: 5678 (any no)
Bank challan date: 07.10.2006
Bank key: SBI
Execute
Print TDS Certificates:
Up to extended with holding tax: the path is same (User level)
With holding tax certified
Print
Give the company code: AML
Fiscal year: 2006
Business place: AMLF
Section: 194C
Posting date: 01.04.2006 to 31.03.2007
Bank challan date: 01.05.2006 to 30.04.2007
Certificate date: 30.04.2007
Signatory: XYZ
Designation: Manager - Accounts
Place of printing: Hyderabad
Execute
Output device: LP01
Select print button
To view the print out from the menu select system àservices àoutput control
Execute
Select spool no. check box
Select display contents button
Printing of annual return:
Up to extended with holding tax the path is same (User level)
Reporting à annual returns
Give the income tax section: 194C
Company code: AML
Fiscal period: 01.04.2006 to 31.03.2007
Extended with holding tax section 194C
Business place: AMLF
Tax deduction account number: AP9879876C
Signatory: XYZ
Designation of signatory: Manager-Accounts
Date of signing: 30.04.2007
Place: Hyderabad
Execute
Ignore the error message
Give the tax deduction account No once again
Execute
Advance payment posting
Advance payment: (F-48)
Document date: 11.09.2006
Type: KZ
Company code: AML
Give the vendor A/C: 8700001
Special G/L Indicator: A
Bank A/C: 200105
Business area: AMH
Amount: 200000
Text: Advance payment posting
Enter
Amount: ‘*’
Business place: AMLF
Business area: AMH: Due on date: 11.09.2006
Text: ‘+’
Document à simulate
Enter
Double click on blue font line items
Save
Invoice posting: F-43
Give the document date: 11.09.2006
Type: KR
Company code: AML
Posting key: 31
Account: 8700001
Amount: 5000001
Business place: AMLF
Business area: AMH: Billing date: 11.09.2006
Text: conversion charges posting
Posting key: 40
Account no: 400200 (conversion charges)
Enter
Remove KA, KB, KC& KD
Enter
Amount: ‘*’
Business area: AMH
Text: ‘+’
Documentàsimulate
Double click on blue font line items
Text: enter ‘+’
Save
Transfer of advance from special G/L to normal by clearing special G/L items:
(F-54):
Document date: 11.09.2006
Type: KA
Company code: AML
Vendor A/C: 8700001
Inv: 100007 (comes default)
Text: advance payment clearing
Select process down payments button
Give the transfer posting: 200000
Document à Simulate and save
From the menu select document display
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