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TDS Section Code - Natural Account Mapping feature

 

 

 

 

 

 

 

 

 

 

 

Tax Deducted At Source(TDS):

As per the Income Tax Act, any company or person making a payment is required to deduct tax at source if the payment exceeds certain threshold limits. TDS has to be deducted at the rates prescribed by the tax department.

For example, According to the rules and regulations of Section 194J of the Income Tax Act, 1961, a person must deduct their Tax Deducted at Source (TDS) only at the rate of 10% when certain payments are made to a certain resident.

An individual should deduct TDS at the rate prescribed, when the following payments are made to a resident, in a fiscal year (higher than Rs.30,000):

  • Amount charged as professional services fee
  • Amount charged as technical service fee
     

Business Requirement:

  • The requirement is to create a Services Purchase Order(PO). Based on the nature of the transaction/service, system should default the TDS Section code as applicable.
  • So, business want to use the 'TDS Section - Natural Account Mapping feature' based on which, system should default the relevant applicable TDS to the transactions.
  • To add, as same supplier site can be a provider of multiple services which attract TDS applicability based on the nature of services, user should be able to use this feature to default the relevant applicable TDS.
  • Also, there can be scenarios where same supplier is providing goods as well as services and only services are eligible for TDS.
  • In this context, Business want to use the TDS Section - Natural Account Mapping feature to map the requirement.
  • But, its observed that TDS is not defaulting on PO matched invoice when TDS section Defaulted based on GL Account Code mapping feature.

Consider the following business case:

  • Create a PO with 2-way matching and invoice match option as 'PO'.
  • Enter PO charge account.
  • Approve the PO and create receipt.
  • Create AP invoice and match it with PO.
  • Notice that TDS section code did not default based on Natural Account Section Code mapping setup.

Because of this issue, user is unable to make use of the "TDS Section - Natural Account Mapping" feature.

For Solution:  Refer to the following MOS Note:

 GST:  TDS Section Code is not defaulting  based on Natural Account and  Section code mapping setup in case of PO matched invoices (Doc ID  2607493.1)