| # Tax Deducted at Source - declarations and payments This functionality is specific for India. TDS is always calculated on the nett invoice amount or advance payment amount. The procedure to declare and pay the withholding tax is similar to the preparation and payment of other tax declarations. For details, refer to To process tax declarations For TDS, you must produce the following reports: TDS Certificate (Form 16 A), which you must send to your suppliers on whose payments you withhold the TDS. Statement of Withheld Income tax Quarterly return of Withheld Income Tax Annual return of Withheld Income Tax LN does not provide these reports. You can use the Tax Analysis (tfgld1520m000) session to print the required data, which you must process manually to produce the required reports. For details, refer to Tax analysis To set up the TDS declaration The procedure to set up and prepare the withholding tax declaration is similar to the set up and preparation of other tax declarations. For details, refer to To set up a tax declaration To set up a TDS declaration If you set up a TDS declaration, note the following points: For your supplier's business partner tax classification, in the Tax Classifications (tctax0116m000) session, you must enter the prescribed terms for the various categories in the Tax Classification field. For example, Company, Association of Persons, Registered partnership. For the collection office as a business partner, in the Business Partners (tccom4100s000) session, you must enter your company's TDS Circle in the Name field. In this way, the TDS Circle can be printed on the tax declarations. The Registration User who creates and saves the tax declaration will be printed on the tax declaration as the Responsible Person for Deduction. For the address of the registration user, in the Addresses (tccom4130s000) session, you must enter the full address details that are required on the tax declaration. The details must include the state, the email address, and the PIN code. For the tax categories in the Tax Categories (tctax0115m000) session, enter the following details: For the tax category code, enter the Section Code that must be used in the tax returns. You can use up to 12 characters. In the description field, enter the TDS Type. For example, enter Subcontractor, Professional Services, Insurance Commission, and so on. For tax codes for non-deducted TDS or TDS with lower rates, the reason for non-deduction or lower rates must be printed on the documents. To achieve this, in the Tax Codes by Country (tcmcs0136s000) session, enter the reason in the Description field. For example, enter "A" - Under section 197. TDS payments You can pay the TDS using a journal voucher or a standing order. For TDS payments, note the following points: For standing orders for TDS payments, use a payment method with not payment steps and in the Standing Orders (tfcmg1110s000) session, select the Use Check Master check box. In the Cash Management master data, you must define a check master for the combination of the collection office's bank relation and payment method. You must create a new check for each payment. The check number must be shown on the tax declaration. For the standing order to pay the withholding tax, in the Standing Orders (tfcmg1110s000) session, enter the Challan number and the Challan category in the Reference field. Related topics To process tax declarations Tax analysis Tax deducted at source (TDS) - overview |