Configuring investor tax based on the loan product

Lenders withhold income tax amount based on investors' investment gains. From this amount, the interest portion is remitted to the government by the lender. The investor can claim this amount while filing the returns as Withheld Tax.

Withholdingtax on interest paid to the investor is configurable can be different for different loan products. This provides additional flexibility to lenders in investor management.

For example, withholding tax rate may be different for indexed loan and non-indexed loan products.

Lenders can configure different investor tax withhold percentage by adding custom logic, to set the investor tax percentage. This is provided through an interface called Investor Tax Provider interface. This custom logic overrides any existing investor tax.

Prerequisites

The following are the prerequisites to configuring the investor tax:

• An investor is created.
• Investor Tax is configured.

Steps

Perform the following steps to configure the investor tax:

1. Log in to your Salesforce account.
2. Click Setup.
3. Click Custom Settings.
4. Go to Fractionalization Parameters label.
5. Click Manage.
6. Click Edit.
7. Provide the global class name implementing the interface loan.IInvestortaxprovidable. The class is implemented by the user.
8. Click Save.

Using the above steps, you can specify the tax percentage for any loan product explicitly.