Checklist for Configuring Withholding Tax for India

You must review the checklist for configuring Indian Withholding Tax document that outlines the checklist for configuring withholding tax for India using ERP Cloud before you implement Oracle ERP Cloud Financials.

1. Enable the India Localization feature.
   Navigate to Opt-in Financials, Features, Regional Localization and select the India check box.
2. Select a financial year for example: 01/04/2018 to 31/03/2019 to set the Withholding Tax calendar for India.
3. Set up the Configuration Owner Tax Options for Withholding Tax (COTO).
   Select the Determine Applicable Regimes in Regime Determination Set for Regime to Rate – Rule Based Approach.
4. Set the Withholding Buckets Level as First Party Tax Registration Number to set the tax regime for India.
5. Set up the taxes for the tax regime. For the Period Level Threshold:
   1. Select Schedule Basis, Period.
   2. Select Withholding Tax Calendar, User-defined Calendar.
   3. Enable the Apply Single Rate on Total Taxable Basis check box to calculate the older invoices when Period Level Threshold is exceeded.
6. Set the Tax rate for Tax.
7. Set the Tax Formula for Tax Calculation for calculating Surcharge, Education Cess, and Secondary and Higher Education Cess for foreign suppliers.
8. Set the Withholding Tax Registration. For registering Tax Deducted at Source Account Number (TAN) for first-party, follow these steps:
   1. Create Legal Reporting Unit Withholding Tax Registration by selecting Tax Registration Type as Others and Validation Type as ORA_IN_TAN.
   2. In the Registration Number field, enter TAN.
9. Set the Withholding Tax Classification Code. The Withholding Tax Classification code is generated automatically based on the tax rate code.
10. Create a Tax Rule based on the business and legal requirement for calculating withholding taxes.