Section Code 

Definition

A system object that represents the organizational unit responsible for collecting and remitting withholding tax, as identified by a TAN.

Each company can have more than one TAN, so in the SAP system, a company code can also have multiple section codes.

Use

Customizing

Define section codes in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings ® Withholding Tax ® Extended Withholding Tax ® Basic Settings ® India ® Define Section Codes.

Day-to-Day Activities

When you post a document with a withholding tax item (for example, a vendor invoice or a credit memo), enter the section code in order to make sure that the tax item is assigned to the correct TAN. For more information, see Entering Vendor Invoices.

In order to ensure that you always enter a section code, we recommend that you create a validation for this field.

Periodic Processing

When you print withholding tax certificates, each of your section codes can define its own forms, depending on which format is required by the income tax office. The certificate supplied with the standard system also shows the address data from the section code.

Reporting

Each TAN holder files its own tax returns. When you prepare a TDS return, you enter the TAN holder’s section code on the selection screen. The annual returns then show only the withholding tax items that are assigned to that section code.