Implementation Updated by Implementation

What is TDS?

Tax deduction at source in India is a means of collecting tax on income, dividends or asset sales, by requiring the payer to deduct tax due before paying the balance to the payee. Under the Indian Income Tax Act of 1961, income tax must be deducted at source as per the provisions of the Income Tax Act.


TDS occurrence is based on what happened first i.e. invoicing or payment. If user has paid money in advance then tds will be deducted on that payment and TDs will not be charges on invoice issued against that payment.

Use Case

Suppose there is a firm “XYZ Ltd”. They are a manufacturing firm. They have to send raw material for fabrication and receive lots of services from different sectors. So, as per Income tax department limit any service above Rs. 180000/- in a financial year comes under TDS.

With this option user can apply TDS on transactions. And user will get report to file TDS return.

Steps to be performed for TDS

1.Go to Account Payable in apps

2.Go to Apps-> Activate TDS App

2.1.Activate TDS

3.Go to Master and Click on TDS Master

3.1.Enter TDS Code, TDS description. Select entity type as required.

3.2-i)Enter tax percentage ii)Select Ledger iii)Tick Invoice and payment as require. (Note: If user tick on invoice or payment then system will ask on both time for deduction of TDS). Click on save & continue.

4.Click on Vendor

4.1.Go to Transaction and click on Vendor Master

4.2-Vendor-> TDS Tab-> i)User can select more than 1 tds code for single vendor. ii)If rebate applicable then user can enter rebate percentage, End date , Value limit. Save the vendor.

5.Purchase Note->i)Select TDS Vendor and it will open a Pop up, if user want to apply TDS then select TDS code and amount (Enter taxable value in amount and if user want to apply tax on invoice value then do not enter any amount here). Click on submit.  Ii)If user does not want to apply TDS then after selection vendor the pop up will open then simple click on close button tds will not apply.

5.1.Click on save & continue.

5.2.In simulation it will show TDS Entry. Click on save & continue.

5.3.Bank Payment-> Select vendor and the same process will be applied.

5.4.Purchase Invoice in Material Management-> Same process for TDS.

5.5.Outsource Job Work Invoicing-> Same process for TDS

6.TDS Report->Click on TDS report in Account Payables.

6.1.User can search data date wise. Here use it will show date wise report.

6.2.Head wise report -> Here it will show section wise.

How did we do?

Purchase Register

Vendor Aging