|Oracle Financials for India Implementation Guide|
Part Number E13657-05
Regime is used define rules applicable to all taxes assigned to it. You need to complete this setup step before you move ahead with other setups.
Setups made for a regime are applicable to all transactions created for the organizations assigned to it. Information defined here is generic unless you assign different properties at the organization level.
To create a TCS Regime, access Regime Registration screen from India Local Receivables > India TCS/VAT/Service Tax > Setup > Regime Registrations.
|Header Section||In this section regime name, description and effective dates of the regime is captured|
|Regime||The LOV contains a new value - ‘Tax Collected At Source’ regime.|
|Description||Short description of the regime|
|Short description of the regime|
|Registrations tab||This section captures the registration details of the regime. These registration details are used in the reports that are generated. You should enter the registration details in the ‘registration value’ column by picking up the appropriate ‘registration type’ and ‘registration name’. You can capture as many registration details as required.|
|Sequence||This is the sequence number of the registration types to be captured. This may not be serially numbered. You cannot use duplicate sequences.|
|Registration Type||Pick appropriate Registration Type from Primary Registration Number, Secondary Registration Number, Others.|
|Registration Name||Pick appropriate Registration Name from TAN No, AR Receipt Class, Batch Source Debit Memo, Batch Source Credit Memo.|
Before you start using the TDS functionality in an Organization, you will have to setup TDS Year Information. This year would be the Income Tax Reporting Year and is independent of the Tax Calendar defined in the Inventory Module. The TDS limits, TDS Reports and TDS Certificate would be based on the period. This year would be the Financial Year defined under the Income Tax Act. There can only be one TDS Year open at a time.
See Also: Defining TDS Year, India Local Payables Chapter of India Localization User’s Reference Manual
The liability arising from the Income Tax Deducted at Source, while making Supplier payments needs to be accounted against an Income Tax Authority. You would create a Supplier and Site for this Authority. Additionally, in the Type field on the Classification tab, choose ‘Tax Authority-IND’. On doing this, when defining a ‘Tax Deduction at Source’ Type of Tax, the Supplier Name would be listed in the ‘Vendor’ field LOV on the Tax Definition screen
See Also: Defining Income Tax Authority, India Local Payables Chapter of India Localization User’s Reference Manual
India Localization comes with pre-seeded, default TDS Sections in the database. However, you should review these default sections and decide whether to change them to suit your business needs. If you want or need to change them, you should query on the ‘TDS_Sections’ from the Purchase Lookup Codes and add a new record, with the relevant descriptions and the effective period. As the same codes are also used for the Works Contract Tax applicable in you state, you might prefer to a new record for defining the relevant sections.
See Also: Defining TDS Sections, India Local Payables Chapter of India Localization User’s Reference Manual
You would use the Tax Definition screen to define the TDS Codes. Choose the ‘Tax Deduction at Source’ option in the Type LOV. Select the Vendor Name, Vendor Site, Account and TDS Section No. Enter the value in the Percentage and Rounding Factor fields. Enter the value in the Surcharge field, wherever necessary.
See Also: Defining TDS Tax Codes, India Local Payables Chapter of India Localization User’s Reference Manual
You can define TDS Threshold for a Vendor Type and TDS Section Code combination. You can define Thresholds for Single Invoice as well as Cumulative Invoice Thresholds. You can setup TDS Threshold Limits for a combination of:
If you wish to setup different Threshold Limits for certain Vendors, you can do the same by setting up “Exception Setup”. You can define as many “Exception Setups” as desired.
Using this setup screen you can define Thresholds for the Section Type ‘TDS Section’.
You can define following Threshold Types:
Single Threshold applies to a certain transaction only. If this Threshold is setup with a monetary limit, TDS will be deducted every time the current Invoice Amount exceeds the Threshold Amount. Those Invoices, which are lower than the Threshold Amount, will be ignored for TDS Calculation.
Cumulative Threshold applies to aggregate of all Invoices for the Financial Year. If this Threshold is setup with a monetary limit, TDS will be deducted on all the Invoices after this monetary limit is reached. In case of the Invoice, due to which the Threshold Limit is reached, TDS will be calculated on all the earlier Invoices also (that were ignored TDS Calculation).
In case both TDS Thresholds are setup with a monetary limit, Single Invoice Threshold will operate only if the Cumulative Invoice Threshold is not reached. Once Cumulative Invoice Threshold is reached, Single Invoice Threshold will be ignored.
You have a flexibility to specify Effective Dates for each TDS Thresholds. These Effective Dates are validated / compared against the accounting date of the Invoice distributions and TDS Thresholds will operate only between these Effective Dates. Once an end date has been put a particular TDS Threshold, you can define a New TDS Threshold for that particular Threshold Type. Using this flexibility you can take care of the Threshold modifications happening from time to time without modifying any setup at the individual Vendor level.
The Supplier TDS Information window allows you to enter TDS related supplier information.
The following table describes the TDS Supplier window.
|Create Pre-Approved TDS Invoice Credit Memo||You can select this box to generate pre-validated TDS invoices and credit memos.|
|TDS Vendor Type||Vendor Type.|
|PAN No||Vendor's PAN.|
|TAN No||Vendor's TAN.|
|Ward No||Ward number of the Vendor.|
|Confirm PAN||Check this box to confirm PAN of the vendor.|
|Default TDS Section||Select a default TDS Section for this vendor. TDS will be deducted based on checking the threshold for this section.|
|Tax Name||You can select a default tax code here. You can select the value for this field only for the Vendor Site level record. Even though the Tax Name is attached here, system will not generate any TDS untill the first TDS Threshold slab is crossed. At any point of time, total TDS deducted would be as per the TDS Threshold setup slab amounts. If the user wants the TDS to be deducted based on the TDS Thresholds setup, then the user need not attach any TDS tax code value here. The value of the TDS tax code will be picked up from the TDS Thresholds setup for a specific operating Unit.|
If the suppliers have applied for a PAN, you can change the value of PAN Number for the suppliers by running the "India - PAN Number Update" concurrent program.
A Transaction Type has to be setup. The Transaction name has to be ‘TDS Credit Memo’. The Name is case sensitive. It has to match the Text given.
The TDS Credit Memo has to be set on a similar fashion except for Batch Source Tab. Navigate to India Local Receivables > Oracle Receivables > Setups > Transactions > Sources.
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