Re: Withholding Tax scenario

Please create a separate Withholding Transaction type and Tax code for this.

While creating the tax code, mention the posting indicator as "2"

For this to work, you need to specify the offsetting account in "Define Accts for W/hold.Tax for "Gross.Up" Offsetting Entry". Transaction is GRU

Then assign that Tax type and tax code for relevant vendors in Vendor master.

The calculation part is

Invoice amount is 10000

TDS is 10%

10000*10/90 = 1111

Broadly, we call it as Reverse Charge Mechanism (RCM)

Hope this helps

Thanks