HI Pankaj,
There are 2 ways of doing this:
1. Please see note 528502. You can make the Derived flow for TDS as relevant for position and in TBB1 the net Interest capitalization will be posted. A BADi is also delivered with this note, which you can use to modify cashflow.
2. The second method works if you are posting to sub ledger accounts and extended withholding Tax is activated in FI.
You have to maintain the tax codes in View TRXV_WT_ASSIGN via SM30 for the product type . transaction type, BP and the relevant update types for iNterest Capitalization / TDS flow. Also in BP you have to maintain the tax info in the tab Customer: Withholding Tax.
Regards,
Nikhik