Hello Fadi,
Meaning of above configuration is,
Say document date is 6th Jan
Customer gets 1% cash discount if payment is done before 5th March ( 6th Jan + 2 months with 5th as fixed day).
Customer gets no discount if payment is done between 5th March and 5th April (6th Jan + 3 months with 5th as fixed day)
.
After 5th April, item becomes over due.
For your requirement, remove second line so that 1% cash discount is applicable till 5th March and item becomes over due after 5th March. Test this in test system once.
Thanks,
V V