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375Dear Experts,
We are facing an issue related to TDS adjustment while applying an advance payment against a Purchase Invoice in D365 Business Central.
Scenario:
- Advance Payment Posted: ₹100,000
- TDS Deducted on Advance Payment: ₹1,000
- Purchase Invoice Created with 5 lines
- Total TDS on Purchase Invoice: ₹2,000
- Advance Payment applied in the Purchase Invoice using Applies-to Doc. Type and Applies-to Doc. No. before posting.
Expected Result:
Since TDS of ₹1,000 has already been deducted on the advance payment, the system should post only the remaining TDS amount of ₹1,000 against the Purchase Invoice.
Actual Result:
The system creates both positive and negative TDS entries during invoice posting. While the adjustment appears to be correct for the first 4 lines, the 5th line contains a negative TDS adjustment amount. Due to this, it is difficult to reconcile and identify the actual TDS amount applicable against the invoice line-wise. Total TDS amount show Rs.700 instead of Rs.1000.
We would like to understand:
- Why is the negative TDS entry being generated on the last invoice line?
- Is this standard system behavior or a product issue?
- How is the TDS adjustment calculation performed when advance payments are applied?
- Is there any setup, patch, or recommended process to avoid such entries in future transactions?
- How should the net TDS amount be verified and reconciled against the Purchase Invoice?
Kindly review the issue and provide your analysis along with the recommended resolution.
Thank you.
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