2776173 - Withholding Tax - India - Unable to Pay Down Payment Request due to the Error : Error while calculating the withholding tax

Unable to clear the down payment request with the Outgoing Bank Transfer due to the errors

Error while calculating the withholding tax
Tax calculation failed; trigger a calculation again
Assigned amount for down payment request must not be zero.

Country:India

SAP Business ByDesign

1. Go to the Liquidity Management work center.
2. New Outgoing Bank Transers.
3. Select the company and Payee and other mandatory settings.
4. Select the Down Payment Request that is required to clear. 

Error while calculating the withholding tax
Tax calculation failed; trigger a calculation again
Assigned amount for down payment request must not be zero.

This issue of failing withholding tax determination at the point of payment seems to be due to Custom Withholding tax code Z123 being defined by you which is same as standard withholding tax code,

for example: Withholding Tax Code 35 - 194J-NC-Professional fees.
 
At the point of payment, withholding tax is recalculated and the system attempts to determine the correct tax code. Here the search is done for tax rate type 19 and income type 194J for withholding tax. Two entries with separate tax codes 35 and Z123 are retrieved  by the system and so the determination fails.

1. Go to the Business Configuration work center.
2. Click Implementation Projects view.
3. Click Open Activity List button.
4. Go to the Fine-Tune tab and select the activity Withholding Tax - India, click Go button.
5. Click Open button. Click on withholding tax rates schedules.

There has to be different Tax Rate Type for the custom tax code and the standard tax code. You have maintained the a different Tax Rate in % that is required for your Custom Tax Code.

Example:

Tax Type Code: 19 - Withholding Income Tax ; Withholding Tax Income Type: 194A - Interest other than Interest on Securities ; Tax Rate Type: 1 - Standard ; Tax Rate in % 10 ( This is for standard tax code settings )

Tax Type Code: 19 - Withholding Income Tax ; Withholding Tax Income Type: 194A - Interest other than Interest on Securities ; Tax Rate Type: 2 - Others ; Tax Rate in % 10 ( This is for custom tax code settings ).

   6. Close this Check withholding tax rates schedules and Click on the activity Check withholding tax codes.

Here, for the custom Withholding tax code Z123, make sure the Tax Rate Type is 2 - Others which is not same as the 1 - Standard and maintain other fields required and save it.

 This should allow the payment of the affected down payments.

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