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Finance | Project Operations, Human Resources, ...
Suggested Answer

Withholding tax to adjust against payments as per slabs defined with fixed and variable portion

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Dear Consultants,

 

We have a scenario, where we must pay a vendor against an invoice and deduct the WHT at payment in a fiscal year. As per legislation, the deduction has a criterion which is:

S.No

Gross Amount of Rent invoice

Rate of Tax

1

Where the gross amount of rent invoice does not exceed
Rs. 300,000

Nil

2

Where the gross amount of rent invoice exceeds Rs.
300,000 but does not exceed Rs. 600,000

5% of the gross amount exceeding Rs. 300,000.

3

Where the gross amount of rent invoice exceeds Rs.
600,000 but does not exceed Rs. 2,000,000

Rs. 15,000 plus 10% of the gross amount exceeding Rs.
600,000.

4

Where the gross amount of rent invoice exceeds Rs.
2,000,000

Rs. 155,000 plus 25% of the gross amount exceeding
Rs. 2,000,000.

 Withholding tax to adjust against payments as per slabs defined with the fixed and variable portion

As per this criterion, we have to withhold the amount against the payment we are going to make as you can see this withholding has some fixed amount and some variable amount o deduct/adjust. How will we configure it?

Thanks

I have the same question (0)
  • Suggested answer
    huijij Profile Picture
    19,811 on at

    Hi sir,

    Please go through the blog to see if it helps:

    community.dynamics.com/.../how-to-configure-withholding-tax-processing-transactions-and-reporting-to-tax-authority

  • Ali Waqas Profile Picture
    on at

    Hi Judy,

    Thank you for your response, but this solution is not matching as i required.

    I required to establish slabs which are in the system but i required that %age should apply on only differential of lower and upper limit, if i have some fix amount for that slabs of lower limit that should also includes in it and this is for a whole year calculation which divides to per month. To explain more i give example below:

    Like table i shared, in 3rd slab 600,000 to 2,000,000 have 10% and 15000 fix.

    if a person annual total is 1,000,000 then

    his calculation is for till 600,000 fix amount is 15000 plus differential of (600,000 and 1,000,000=400,000) on that 400,000 we will apply %age which is 400,000*10%=40000.

    total against 1,000,000 is 15000+40,000=55000 annual.

    if i required per month then 55,000/12=4583.333 is the amount per month i required to book.

    Please look this scenario, how to book it. Thanks

    Regards,

    Ali Waqas

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