In Accounts Paybles what is the meaning holding tax ? Can u give the answer ho

In Accounts Paybles what is the meaning holding tax ? Can u
give the answer holding journal entry

Question Posted / bala bhaskar

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In Accounts Paybles what is the meaning holding tax ? Can u give the answer holding journal entry..

Answer / suvarchala

Payables provides flexibility in defining withholding tax
rates with specific controls. When you define a withholding
tax code, you indicate first whether you will have any
amount or rate controls by selecting one of the following
rate structures:

Period Limit. After you pay a certain amount for
withholding tax in a period, Payables stops withholding
taxes. For example, for each special calendar period,
Payables will withhold no more than $10,000.
Flat Rate. The withholding tax has no amount or period
limits.
Amount Ranges. The tax rate depends on how much you have
already paid during a time period. Base the paid amount on
the gross amount of total paid invoice amounts, or on the
total amount of tax withheld. The time period can be either
per withholding tax calendar period or per invoice. For
example, define a tax that for each year will withhold at a
rate of 10% until you pay $100,000 in invoices, and then it
withholds at a rate of 15% after you pay $100,000.
In addition to these controls, the same withholding tax
code can have different rates depending on the effective
date. For example, a withholding tax has a rate of 10% one
year and 11% the following year

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In Accounts Paybles what is the meaning holding tax ? Can u give the answer holding journal entry..

Answer / bhaskar

These are the setup's u need to do for Automatic
withholding tax.
1)define tax authority supplier
2)define special calender
3)define withholding tax code
4)enable the option called "use with holding tax" in
payables options.
5) assign the tax code to supplier site --> here the tax
code will be
assigned to the normal supplier in withholding tax tab.
hope it will help u

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In Accounts Paybles what is the meaning holding tax ? Can u give the answer holding journal entry..

Answer / ravi

with holding tax is a that we pay to income tax authority ,
for this first we define income tax authority as a supplier
and define input and out put accounts and also define
special callender for this w egenrate a with holding tax
invoice and pay to tax authority

The jouransal entries are
when invoice is raised--
Accrual
to
Liabilty

When payment is made--
Liability
to
Cash
With holding tax

and

With holding tax exp
to
Payabel