Threshold Calculation Based on Date Created:
- Currently, the TDS calculation is determined using the date of creation of the transaction rather than the transaction date (trandate).
- This means that if a backdated transaction is created (e.g., an April bill entered in June), it will be considered for TDS threshold calculation based on the June date of creation. This validation is a system standard in NetSuite to comply with legal requirements and to avoid modifications to audited or backdated transactions.
2. Threshold Application Behavior:
- When the accumulated bill amount reaches or exceeds the specified threshold (₹5,000,000 for code 194Q), TDS is applied on the bills.
- Since the TDS rule is set to be non-retrospective, TDS is applied only on the excess amount over the threshold.
3. Behavior When a Bill is Deleted:
- The India Accumulated Tax Bucket records the total accumulated amount and tax calculations. It gets updated whenever a vendor bill is created, edited, or deleted.
- However, similar to the threshold calculation, the deletion date is considered rather than the transaction date, and the impact is reflected accordingly.
- The India Audit Trail on the Accumulated Tax Buckets page shows changes in the tax amounts, but only based on the date of action (creation, edit, or deletion), not the trandate.
Example:
User created Tax Deduction at Source Rule (1.5%) with a Document Threshold of 30,000.00 and Year Threshold of 100,000.00, and wants to know how TDS Liability will be calculated when Vendor Bills with the following amounts are raised:
- Bill 1 = 4,000.00
- Bill 2 = 15,000.00
- Bill 3 = 40,000.00 (changed to 25,000.00 after Bill 5 is raised)
- Bill 4 = 50,000.00
- Bill 5 = 25,000.00
Solution:
Accumulated Period Taxable Amount is the total amount of Bills raised for a combination of one Customer and one Section Code.
Accumulated Document Taxable Amount is the total amount of Bills raised that met the Document Threshold for a combination of one Customer and one Section Code.
Accumulated Tax Amount is the amount of total Tax charged for a combination of one Customer and one Section Code.
Bills 1 and 2 did not cross the Document and Year Threshold so they would not be charged wit TDS Liability.
Bill 3 is charged by 600.00 (40,000.00 x 1.5%) since Document Threshold was met.
Bill 4 is charged by 975.00 ((105,000.00 x 1.5%) – 600.00) since Document Threshold and Year Threshold was met and 40,000.00 of the total bills raised has been charged with TDS Liability already.
Bill 5 is charged by 375.00 ((130,000.00 x 1.5%) – 1,575.00; or 25,000.00 x 1.5%) since the Year Threshold was crossed and the Year Threshold Amount has been charged with TDS Liability. Since it did not meet the Document Threshold, the amount of Accumulated Document Taxable remains the same.
Bill 3 was changed to 25,000.00 causing the reduction of Accumulated Document Taxable Amount, Accumulated Tax amount, and TDS Per Bill in amount.