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How to post an interest accrual with WHT and consider its effect in the next interest posting?

Former Member
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Hi,

We are using the treasury module for borrowings from Banks & FIs. At the year end, i.e., 31st March, we would like to post an accrual posting with WHT (withholding tax) as per statutory norms. The accrual posting is reset on the next day itself, i.e., 1st April. However, whenever the interest actual posting based on the due date happens, SAP deducts WHT on the full value of the interest posting, instead of the differential value. This results on an excess WHT to the extent of the WHT on the accrual value.

Request you to help me with some solution for the same.

Regards,

Yusuf Sheikh

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Answers (1)

Answers (1)

former_member566828
Active Contributor
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Hi Yusuf,

as far as I understand, withholding tax (WHT) is only paid at the moment when interest amount is actually paid out.

on the other hand, the accrual of interest represents recognized portion of interest (the total amount according to a contract), but not yet paid out - is it really mandatory to disclose the accrued part of WHT at every End of the Month?

Kind regards,

Renatas

Former Member
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Hi Renatas,

Thanks for the reply. It is mandatory to book WHT on interest accrual postings as well in India.


However, the WHT amount posted when the actual interest posting happens later should be adjusted by the value posted during the earlier accrual posting.


Regards,

Yusuf Sheikh