TDS calculation on invoices from the Free text invoice page

This topic explains how to calculate Tax Deducted at Source (TDS) on invoices by using the Free text invoice page.

  1. Go to Accounts receivable > Invoices > All free text invoices.

    Free text invoice page

  2. Select New to create a free text invoice, and enter the required details.

  3. Select the Invoice tab. In the Withholding tax group section, the Nature of assessee field shows the nature of assessee category of the customer.

  4. In the TDS group field, review or change the default TDS group that is defined for the customer.

    Note

    When you select a value in the TDS group field, the TCS group field becomes unavailable. TDS is calculated only if the Calculate withholding tax option is set to Yes for the customer on the All customers page.

  5. On the Tax information tab, in the Company information section, in the Name field, select the company name for an alternate address that has been set up for the company.

    In the Withholding tax section, the Tax Account Number (TAN) field shows the tax account number (TAN) for the selected company.

  6. On the Invoice lines tab, create invoice lines, and enter the required details.

    In the Withholding tax group section, the Tax Account Number (TAN) field shows the TAN, and the TDS group field shows the TDS group.

  7. Select Withholding tax to open the Temporary withholding tax transactions page. The upper part of this page has the following fields:

    • Withholding tax amount in total – The total TDS that was calculated for the transaction for the TDS group.
    • Value – The total percentage that was used to calculate TDS for the transaction. The total percentage is based on the formula that is defined for the TDS tax codes and attached to the TDS group.
    • Adjusted withholding tax amount in total – The total adjusted TDS amount for all tax codes in the TDS group.
    • TDS – A selected checkbox indicates that a TDS group is attached to the transaction.

    The fields on the Overview, General, and Adjustment tabs show the calculated TDS amount and details of the adjusted TDS amount for each TDS tax code that is attached to the TDS group.

  8. Select Threshold to open the Threshold page, where you can review the threshold limit that is defined for the TDS tax component that is attached to a specific TDS tax code.

  9. Select Formula designer to open the Formula designer page, where you can review the formula that is defined for a specific TDS tax code.

  10. Post the free text invoice. The TDS amount that is calculated for the free text invoice is posted to the receivable account that is defined for each TDS tax code in the TDS group. The receivable accounts for TDS tax codes are defined on the Withholding tax codes page.

  11. Select Posted withholding tax to open the Withholding tax transactions page. The Value field shows the total percentage that was used to calculate TDS for the transaction.

    The fields on the Overview, General, and Amount tabs show the TDS amounts that were calculated on the invoice lines.

  12. Review the TDS calculation information for each TDS tax code that is attached to the TDS group.