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Dynamics 365 Community / Forums / Small and medium business | Business Central, N... / TDS u/s 194Q Checking ...
Small and medium business | Business Central, N...
Suggested Answer

TDS u/s 194Q Checking Threshhold Limit of Rs. 50,00,000/- on Yearly Basis

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Posted on by Jainam M. Kothari 15,817 Super User 2026 Season 1

In Microsoft Dynamics 365 Business Central (BC Versions 27 and 28), is the TDS threshold amount of ₹50,00,000 calculated on a yearly (financial year) basis?

Currently, the system appears to consider cumulative TDS-related entries from the previous financial year. As a result, if the total exceeds ₹50,00,000 in the previous year, TDS is deducted from the very first invoice in the current year.

However, as per expected behaviour, the system should:

  • Evaluate the ₹50,00,000 threshold within the current financial year only, and
  • Apply TDS only after the threshold is exceeded in the current year, not based on previous year transactions.

Is this the standard behavior in BC, or is this a known issue in Versions 27 and 28?

Categories:
Dynamics 365 Business Central
I have the same question (0)
  • Suggested answer
    Tech-Lucky Profile Picture
    Tech-Lucky 1,279 Moderator on at
    This appears to be a Microsoft-side issue. I’ve received similar reports from multiple users and clients, and tickets have already been raised with Microsoft. As of now, there’s no confirmed solution or update from their side.
  • Gerardo Rentería García Profile Picture
    Gerardo Rentería Ga... 25,800 Most Valuable Professional on at

    Hi, good day
    I hope this can help you, and give you some hints.

    Update 27.1 for Microsoft Dynamics 365 Business Central 2025 Release Wave 2 (Application Build 27.1.41776 Platform Build 27.0.41766) - Microsoft Support

    611260

    TDS is being calculated incorrectly on advance payments under Section 194Q.

    Best Regards
    Gerardo

  • Suggested answer
    Assisted by AI
    OussamaSabbouh Profile Picture
    OussamaSabbouh 13,627 Super User 2026 Season 1 on at
    Hello,
    It should be treated on a financial-year basis, not carried forward blindly from the previous year. Microsoft’s India docs for TDS 194Q describe the ₹50,00,000 threshold as applying to purchases during the previous/current financial-year logic window, and they use an initial threshold achieved value/opening balance concept only to carry the accumulation from the start of the same financial year up to the applicability date, not to keep last year’s total alive into a new year. So if BC v27/v28 is deducting TDS from the first invoice of the new financial year because last year crossed ₹50 lakh, that does not sound like the expected standard behavior; it looks more like setup/data carry-forward around initial threshold achieved value/opening balance or a product issue that needs verification.
     
    Regards,
    Oussama Sabbouh

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