INDIA LOCALIZATION:TDS adjustment entry process

 

https://technet.microsoft.com/en-us/library/jj664585.aspx

 

***[BUSINESS PROCESS] ***

Invoice posted using TDS and adjustments are common

 

 

***[REPRO STEPS GROUP] ***

Test done using INMF demo data

 

Prerequisite setups:

 

Note: All setups are as is available in INMF India demo data

1. TDS setup
   

   General Ledger>Setup>Withholding tax>Withholding tax codes
   

 

Select record “Rent”

 

Click on values

 

 

 

2. Setup withholding tax group from GL > setup > Withholding tax > withholding tax group

Select Withholding tax group: Rent

Tax type: TDS

 

 

Click Designer

 

3. Check Vendor and attach TDS group from AP > common > Vendors > all vendors

Create new Vendor “INMF-000014”

Invoice delivery > Withholding tax > Calculate withholding tax is marked

Invoice delivery > Withholding tax > TDS group >Rent

Tax information > PAN information >Status: available

Tax information > PAN information >Number: Filled in

Save and close the form.

 

Scenario 1: Make an adjustment of TDS as in case you want to reverse only the TDS amount and no reversal of original invoice itself

Transaction flow:

1. Post an General journal from GL > Journal > General journal

Name: GenJrn

Click on Lines

Date: 1/11/2017

Account type: Vendor

Account: INMF-000014

Credit: 5000

Offset Account type: Ledger

Offset account: 600150

Withholding tax > TDS group: Rent

 

 

 

Click on Withholding tax button to see withholding tax calculation

 

Click close

 

Post the journal and check voucher

 

Inquiries>Voucher

 

Click posted Withholding tax

 

2. Post an TDS adjustment by using Create Withholding tax Journal function from GL > Journal > General journal

Name: GenJrn

Click on Lines

 

Click Functions>Withholding tax journal

 

 

Fill in details as below

Tax group: Rent

Tax Direction :Payable

Vendor : INMF-000014

 

 

 

Click select transaction to select the voucher we want to adjust TDS for

 

Then click Reference to tax journal

 

Note that the Voucher ,Default offset account type and Default offset account gets populated by the system

 

 

Now enter -5000 in the amount origin field as we want to reverse the effect of TDS alone

Click Calculate tax

 

 

Click transfer

 

The Tds adjustment line gets transferred to the GL journal lines

 

Post the journal and

check voucher

 

Inquiries>Voucher

 

We see that the 202102 TDS payable account is getting reversed for 500 Rs correctly

 

Click posted withholding tax

 

 

Step 3: Check Vendor Balance

INMF/Accounts payable/Common/Vendors/All vendors

Click Transactions

 

We see that the vendor balance is -5000 because we just reversed the TDS amount alone

 

Step 4: Now run TDS settlement

INMF/General ledger/Periodic/India withholding tax/Withholding tax payment

 

Fill in details as shown below

 

 

 

Now check Audit trail

INMF/General ledger/Inquiries/Audit trail

Check last entry Sales tax reporting>voucher transactions

Posted Withholding tax

 

Notice that that both the original TDS and Reversed TDS amount are accounted and hence net effect is zero which is the expected result

 

Scenario 2: Make a reversal of original vendor invoice along with TDS itself

Transaction flow:

1. Post an General journal from GL > Journal > General journal

Name: GenJrn

Click on Lines

Date: 1/11/2017

Account type: Vendor

Account: INMF-000014

Credit: 6000

Offset Account type: Ledger

Offset account: 600150

Withholding tax > TDS group: Rent

 

 

 

Click on Withholding tax button to see withholding tax calculation

 

Click close

 

Post the journal and check voucher

 

Inquiries>Voucher

 

Click posted Withholding tax

Step 2: To reverse the whole invoice along with TDS

INMF/Accounts payable/Common/Vendors/All vendors

Select vendor INMF-000014

Click Transactions

Selct the invoice posted with 6000(Base amount)-600(TDS)=5400 Rs

 

Click Reverse transaction and say ok

 

Check Voucher

Posted withholding tax

We see that the entire invoice along with TDS is reversed correctly

 

Step 3: Now run TDS settlement

INMF/General ledger/Periodic/India withholding tax/Withholding tax payment

 

Fill in details as shown below

 

Click Ok

 

 

Now check Audit trail

INMF/General ledger/Inquiries/Audit trail

Check last entry Sales tax reporting>voucher transactions

Posted Withholding tax

 

Notice that that both the original TDS and Reversed TDS amount are accounted and hence net effect is zero which is the expected result