Withholding Tax Key 

Definition

A system object that you use to classify withholding tax items according to which section of the Income Tax Act they belong to. This information is required in TDS returns.

Use

Customizing

Check the withholding tax keys provided in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings ® Withholding Tax ® Extended Withholding Tax ® Basic Settings ® Define Withholding Tax Keys.

Assign an official withholding tax key to each withholding tax code.

Day-to-Day Activities

Whenever you post a withholding tax item, assign it a withholding tax code as normal. Since each withholding tax code is also assigned to an withholding tax key, the system automatically knows which section of the Income Tax Act you have withheld the tax under.

Reporting

When you prepare a TDS return, it shows which section of the Income Tax Act you withheld each item under.