Tax Deduction at Source (TDS)

The India Localization Tax Engine SuiteApp enables us to calculate Tax Deduction at Source (TDS) on vendor bill transactions. Under the Indian Income Tax Act of 1961, this concept was introduced to collect tax from the very source of income. Tax is then deducted when the invoice or actual payment is issued, whichever happens first.
According to this concept, a person (deductor) who is liable to make a payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government. The deductee from whose income tax has been deducted at source would be entitled to get credit for the amount deducted based on Form 26AS or TDS certificate issued by the deductor.

The India Localization Tax Engine SuiteApp lets us calculate TDS on vendor bills. We can do the following using the TDS feature:

• Create TDS tax codes and tax types.
• Create TDS tax rate rules to calculate TDS on vendor bills.
• Calculate TDS on vendor bills.
• View tax details to help review the taxes before submission to the tax authority.
• Create TDS challan vouchers.
• Offset the changes in TDS due to modification or deletion of bill by creating TI Journals automatically.

Setting Up Tax Deduction at Source
After installing the India Localization Tax Engine SuiteApp, set up the following configurations:

1. Set up tax information on a vendor record.
2. Assign the tax account for each TDS tax type.
3. Set up India tax section codes for TDS.
4. Create TDS tax rate rules.