Applying Tax Deduction at Source on Vendor Bills
After a vendor bill is approved, the India Localization SuiteTax Engine automatically calculates the Tax Deduction at Source (TDS) on the bill. TDS is calculated on each line item based on the default section code and the TDS tax rule that applies to an item.
When you create, edit, or delete a bill, the SuiteApp stores the tax information in the India Accumulated Tax Bucket record. The India Audit Trial subtab on the India Accumulated Tax Buckets page lists any change in taxes due to creation, modification, or deletion of a bill.
For more information, see India Accumulated Tax Buckets for TDS.
In addition, the SuiteApp creates a TI Journal to offset the change in TDS tax liability when the accumulated bill value exceeds the TDS threshold levels. For more information, see TDS TI Journal.
To calculate TDS successfully, the Standard Journal Entry form must be active. To activate the form, go to Customization > Forms > Transaction Forms.
To apply TDS on a vendor bill:
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Go to Vendor Dashboard > Transactions > Enter Bills.
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Select the vendor.
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Click the Expenses and Items subtab.
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Enter the expenses or items for this bill.
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In the India Tax Section Code field, review and modify the information as required.
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(Optional) In the India Tax Nature of Remittances field, select the nature of remittance for each line item only for the following scenarios:
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Vendor is Non-Resident Indian (NRI).
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Subsidiary is set to India.
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Expense or item has section code.
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Enter other required details.
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To preview calculated tax, click Preview Tax.
When you preview tax, the SuiteApp determines the appropriate nexus for the transaction and uses the tax engine associated with the nexus to calculate the taxes. After tax calculation, the tax details appear on the Tax Details subtab on a transaction record.
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Click Save.
The Tax Deduction at Source feature does not support overriding tax details on a vendor bill. You will receive an error if you try to modify the tax information by checking the Tax Details Override box on the Tax Details subtab.
TDS TI Journal
TI journal for TDS is automatically created in the following scenarios:
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When the accumulated vendor bill value exceeds vendor exemption, year level, and document level thresholds.
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When you create a reversal transaction for a vendor bill on which TDS is calculated.
When the accumulated amount of a particular vendor bill exceeds the threshold, the SuiteApp calculates TDS retrospectively or non-retrospectively based on the TDS tax rule applied to the bill.
If you delete a vendor bill or edit bill details such as value, vendor name, or section code, the tax liability also changes. The SuiteApp creates a TI Journal to offset this change in tax liability. Every TI Journal record contains the bill ID of the bill for which the journal is created.
The SuiteApp creates a TI journal record based on transaction or section code.
India Accumulated Tax Buckets for TDS
India accumulated tax buckets is a custom record that contains the tax data of a bucket. A bucket is a combination of a TAN, section code, vendor, and accounting period.
The India Accumulated Tax Bucket record contains the accumulated net amount and tax amount of a bucket. When you create, edit, or delete a vendor bill, the SuiteApp updates the accumulated net amount and accumulated tax amount of the bucket associated with the bill. The SuiteApp lists any change in the accumulated tax amounts for a bucket under the India Audit Trail subtab on the India Accumulated Tax Buckets page.
After calculating TDS vendor bills, you can view the tax details for all your bills. For more information, see Viewing Tax Deduction at Source Tax Details.