Hi,
I have an issue in withholding tax exemption. There is a letter issued by the income tax department to the effect that for a particular vendor during the financial year say for 2011-2012, he is eligible for a lower rate deduction of 0.1% instead of normal 2% up to an amount of say Rs.250000. Any amount beyond Rs.250000 we can deduct normal TDS @ 2%. We have created a separate tax code using functionality withholding tax formula where we define the lower percentage and amount limit etc. which is working fine. The issue is at the beginning of the next financial year say 1st April 2012 the withholding tax code in the vendor master is to be changed to normal rate tax code. If this is not done the withholding tax is deducted at the lower rate for the vendor even though he is not eligible for the same as the exemption conferred on him by the department is only up to 31st March 2012. The client says that he does not want to go and change the vendor master every year and that the system should automatically resort to deducting tax@ 2% from 1st April 2012. If you see the configuration settings in SPRO there is only 'Valid from' date is there and there is no 'Valid to.
Can anyone provide a solution to this?
Regards.
Ramkumar B.