[New Feature] (India) Reversal of vendor TDS at the time of settlement when deducted on both Invoice and payment

Dear Dynamics 365 Community,

Welcome to my next blog on a newly introduced feature by Microsoft “(India) Reversal of vendor TDS at the time of settlement when deducted on both Invoice and payment”.

We shall discuss this feature in detail with example

Let’s explore

Scenario

As per INDIAN Income tax law, TDS should be deducted from the vendor invoice or vendor payment whichever is earlier. On enablement of this feature, if the user deducts TDS on both vendor invoice and vendor payment separately then at the time of settlement of vendor invoice with vendor payment, tax on the transaction posted later will reverse automatically through a related voucher

Pre-requisite

1. To enable this feature, the product version of Dynamics 365 FO must be or after 10.0.19, PU43
2. To use this feature, legal entity should be an INDIAN localization enabled

Configuration

1. Step 1- Navigate to System Administration-> Workspaces-> Feature Management – Enable the feature “(India) Reversal of vendor TDS at the time of settlement when deducted on both Invoice and payment”

          2. Step 2 :Navigate to Accounts payable-> Setup-> Accounts payable parameters-> Number Sequence Tab-> Add the Number sequence into Withholding tax related voucher

The configuration is done

 Functionality  

Let’s check the functionality, how this works

I have booked one payment journal on 1^st July 2021

Now booked one invoice on 5^th July

Now, we shall settle these two transactions, this new feature will reverse the TDS which was booked later (Vendor Invoice in this example)

Once settled, the TDS is reversed as per the expectation automatically for the voucher which was booked later, vendor invoice in this case.

Below marked in red line is the same voucher, which we have configured for withholding tax related voucher in Accounts Payable parameter, this was generated automatically by system with reversed TDS amount.

By this process, user will have the option to reverse the duplicate TDS automatically from vendor transaction, 

This is for this blog, thanks for watching and stay tuned for more info like this.