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Dokumentation

SIMG_CFORFBT059V_IN - Define Exemption Reasons

PERFORM Short Reference   Vendor Master (General Section)  
This documentation is copyright by SAP AG.

Use

In this and the following IMG activities, you define withholding tax codes that you use to post the following invoice items and payment items under Sections 194 A, 197, and 197 A of the Income Tax Act:

• Items subject to a reduced rate of withholding tax

• Items that are exempt from withholding tax

When you come to prepare a TDS return, the return shows how many rupees' worth of business you taxed at a reduced rate and how much was exempt from tax.

For details of how these IMG activities work, see the example below.

Requirements

• You have defined withholding tax types and defined withholding tax codes for calculating tax at the reduced rates and for withholding tax exemptions.

• You have assigned them to your customer masters and vendor masters.

Activities

In this IMG activity, you create the following exemption reasons:

Reason	Section	Explanation	Legal status
AC	194 A (3) (iii)	Interest is less than INR 2,500	Legal person
BC	194 A (3) (i)	Financial institutions	Legal person
CC	197 A (1A)	Exemption certificate holders	Legal person
AO	194 A (3) (iii)	Interest is less than INR 2,500	Natural person
BO	194 A (3) (i)	Financial institutions	Natural person
CO	197 (A1)	Exemption certificate holders	Natural person

Example

This example shows how the following IMG activities work together. Assume that you want to record items that are exempt from tax under Section 197 A. You proceed as follows:

IMG Activity	What to Do
Define Exemption Reasons	Define the exemption reason for legal persons listed under "Activities" above, CC.
Classify Exemption Reasons	Assign the exemption reason to Section 197 A.
Assign Exemption Reasons to Withholding Tax Codes	Assign the exemption reason to the withholding tax code that you use for transactions exempt from Section 197 A taxes.

Assign Exemption Reasons to Withholding Tax Codes

Assign Exemption Reasons to Withholding Tax Codes

Assign Exemption Reasons to Withholding Tax Codes

Assign Exemption Reasons to Withholding Tax Codes

BAL Application Log Documentation   TXBHW - Original Tax Base Amount in Local Currency  
This documentation is copyright by SAP AG.

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