Understanding the Calculation of TCS for Prepayments

You use the TCS Prepayment program (P75I603) to calculate the tax liability for the prepayment received from the customer. A prepayment is an advance amount remitted by a customer prior to a transaction. The TCS Prepayment program calculates the tax collected at source (TCS), TCS surcharge, and education cess for the unapplied receipts, and displays the balance amount after the deduction of TCS, surcharge, education cess, and secondary higher education cess. You use the Standard Receipts Entry program (P03B102) to create an unapplied receipt for the prepayment.

The unapplied receipts are standard receipts created for advance payments received, and do not have matching invoices.

The system stores the prepayment information in the TCS Prepayment Transaction File table (F75I611) and TCS Prepayment Master table (F75I603).