1.9.2 Features of the Product- Tax Linkage Definition screen

1. On Tax Details screen, specify the details.

   Note:

   The fields which are marked in red asterisk are mandatory.

   For more information on fields, refer to the field description table.

   Table 1-20 Tax Details - Field Description

   Field	Description
   Tax Component and Basis Component	Tax can be applied on the basis of any component that is taxable according to the laws in your country. This component is called the Basis Component. The method of tax application defined for the Tax Rule will be applied on this component.
   Event	You should specify the event for which the tax is applicable. For example, if you specify that the tax is to be applied upon initiation of the contract, then the liquidation entries for tax will be passed when the contract is initiated. If you specify the event as the Maturity of the contract, the tax will be liquidated upon Maturity of the contract. Similarly, if you specify that the tax be to be applied at the time the commissions are collected from the customer, then the entries for tax will be passed when the commission is paid.
   Tax Type	The type of tax, decides the bearer the tax. It could be the bank or the customer. A customer bears withholding type of tax and the tax component is debited to the customer’s account. The bank bears an expense type of tax and the tax component is booked to a tax expense account. Note: The tax details specified for a product will be automatically applied on all contracts involving the product. However, while processing a contract, you can waive the application of all or specific tax rules for the contract.
   Minimum Interest Rate Code for Tax	This field is appears only for LD and MM product maintenance. You need to specify the rate code that will be used to determine the minimum interest rate for the tax to be applicable. If the rate code is not defined, then the minimum interest rate will be taken as 0.

2. Click the Ok button to close the screen.