TDS payment overlook

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Posted on by Raghav3022

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Hi,

In Business Central, when the TDS 'Payment Overlook’ boolean is marked true, TDS is not being calculated in Purchase Invoices.

Ideally, it should still calculate in Purchase Invoices and only be skipped in Payment Journals (which is working fine).

Has anyone faced this issue, and how can it be resolved?

Thanks in advance.

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Dynamics 365 Business Central

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Pallavi Phade 5,510 Super User 2026 Season 1 on at

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Namaste @Raghav3022

In indian Taxation , Threshold overlook is to calculate TDS once invoice or payment amount reaches threshold amount

If threshold amount is 10000, TDS will not be calculated until invoice amount or summation of invoice amount for that section reaches 10000.

Please check seciton code , threshold amount , calc. over & above threshold

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Pallavi Phade

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Raghav3022 227 on at

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Hi @Pallavi Phade

My issue is regarding the Payment overlook boolean in the vendor allowed TDS sections.

If it is turned on, ideally it should not calculate TDS in payment journals but in our case TDS is not calculated in invoice also.

Thanks

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Pallavi Phade 5,510 Super User 2026 Season 1 on at

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Namaste @Raghav3022

Thnak you for clarification , For Taxes calculation , use-case plays an important role

Can you please use-case configuration

Computation Script

Check Computation Rules

You should get condition in Vendor Allowed Section - Payment overlook boolean

Or help me with Use-case which is gettng triggered i will guide you

Regards

Pallavi Phade

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Rishabh Kanaskar 6,225 Super User 2026 Season 1 on at

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Hi,

This is standard behavior in the India Localization. When Payment Overlook is true, TDS calculation is skipped at the invoice level and is only expected at payment time.

If you want TDS to calculate on Purchase Invoices even with Payment Overlook enabled, you’ll need a customization, there’s no standard setup to change this behavior.

Thanks

Rishabh

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Sumit Singh 11,795 Super User 2026 Season 1 on at

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Hi,

May not use Payment Overlook on the vendor if you still want TDS on purchase invoices.
Instead, let invoices calculate TDS normally and skip TDS on payments by leaving the TDS Section blank on Payment Journal lines (or use a separate journal/batch where TDS fields are hidden). Business Central only computes TDS when required fields (like TDS Section, TAN, etc.) are present—if you omit them on payments, TDS won’t calculate, but invoices will continue to calculate TDS.
References
[1] TDS calculation on Purchase and Payment Transactions - Business Central ...
[2] TDS U/s 194C is Not Calculated even though the Threshold Limit is ...

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Nimsara Jayathilaka. 5,093 Super User 2026 Season 1 on at

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Hi

In standard BC (India localization), the Payment Overlook flag works globally — if it’s marked, TDS is skipped on both Purchase Invoices and Payment Journals. That’s why you see it not calculating at invoice level.

➡ To get TDS on invoices but skip only at payments, you’ll need a customization (event subscriber/extension) to change the behavior.

➡ Without customization, the functional workaround is to keep Payment Overlook unchecked so TDS is calculated on invoices, and then manage the payment logic separately.

So this is expected behavior, and achieving your requirement will need a small development change.

Thanks

Nimsara

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