(IND) About calculating TDS based on PAN availability
Important
This content is archived and is not being updated. For the latest documentation, see Microsoft Dynamics 365 product documentation. For the latest release plans, see Dynamics 365 and Microsoft Power Platform release plans.
Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2
When you apply tax deducted at source (TDS) to vendor payments, you must specify the vendor’s Permanent Account Number (PAN). If the PAN is not available, TDS is calculated at the highest rate.
You can verify a vendor’s Permanent Account Number (PAN) availability in the Vendors form, on the Tax information FastTab. If the Status field is set to Applied, Invalid, or Not available, the TDS is calculated at the highest rate.
When you generate vendor statements or reports, the PAN status of the vendor, as it is recorded in the system at the time of reporting, is included in the statement or report. The PAN status for the vendor is a part of what determines the rate of the TDS.
Set up TDS calculation for vendors
Complete the following tasks to calculate and deduct TDS for vendors:
Set up general ledger parameters. For more information, see (IND) General ledger parameters (modified form).
Set up a chart of accounts.
Set up withholding tax groups and withholding tax components. For more information, see (IND) Withholding tax groups (modified form), and (IND) Withholding tax components (form).
Set up withholding tax component groups and withholding tax authorities. For more information, see (IND) Set up withholding tax component groups for TDS tax types, (IND) Withholding tax component groups (form), (IND) Set up withholding tax authorities for TDS tax types, and (IND) Withholding tax authorities (form).
Set up withholding tax settlement periods and withholding tax reporting types.
You must also complete the following procedures to calculate and deduct TDS based on PAN availability: