How to: Set Up Tax Deducted at Source
In Microsoft Dynamics NAV, you must set up Tax Deducted at Source (TDS) groups and TDS details to calculate the TDS amount. TDS groups represent the various sections of the Income Tax Act under which the taxes are deducted. In the TDS Groups window, you must define the conditions for deducting tax for each group. You must also define the nature of transaction for which the TDS is applicable.
You must also set up the following TDS prerequisites before setting up TDS:
A new general ledger account for each type of TDS in the chart of accounts
Number series
TDS tax information
TDS rounding precision
Income tax accounting periods
Tax account numbers
TDS nature of deductions
TDS assessee codes
TDS parties
TDS concessional codes
Correction types
Nature of Deductions (NOD) lines
To set up tax deducted at source groups
In the Search box, enter TDS Groups, and then choose the related link.
Fill in the fields as described in the following table.
Field Description TDS Group
Specifies the TDS group for which you want to define the TDS group setup.
Effective Date
Specifies the effective date of the TDS threshold.
TDS Section
Specifies the applicable TDS section per the Income Tax Act.
TDS Threshold Amount
Specifies the threshold limit for each TDS group. The TDS amount will be deducted only if the total transaction with the assessee exceeds the threshold limit in the financial year.
Surcharge Threshold Amount
Specifies the surcharge threshold limit for the TDS group. The surcharge amount will be deducted only if the total transaction with the assessee exceeds the threshold limit in the financial year.
Per Contract Value
Specifies the per contract value for the TDS group. The TDS amount will be deducted only if the total transaction with the assessee exceeds the per contract value for the threshold amount in a financial year.
Non Resident Payments
Specifies if the TDS group pertains to nonresidents.
TDS Account
Specifies the TDS payable account for the TDS group.
No. Series
Specifies the number series for the TDS group. This number series is used to automatically generate the TDS certificate number.
When a TDS certificate is generated, a number is assigned to the certificate according to the selected number series. This number is used to keep track of the Form 16A certificate.
Choose the OK button.
You must define the TDS details such as the TDS rates for each NOD assessee code.
To set up tax deducted at source details
In the Search box, enter TDS Setup, and then choose the related link.
Fill in the fields as described in the following table.
Field Description TDS Nature of Deduction
Specifies the TDS nature of deductions.
Assessee Code
Specifies the TDS assessee code.
TDS Group
Specifies the TDS group selected in the TDS Nature of Deductions window. For more information, see How to: Set Up Nature of Deductions.
Effective Date
Specifies the effective date of the TDS rate.
Concessional Code
Specifies the TDS concessional code if the TDS rate is concessional.
TDS %
Specifies the TDS percentage.
Surcharge %
Specifies the surcharge rate that is calculated for the TDS amount, if applicable.
eCESS %
Specifies the education CESS rate that is calculated for the aggregate of the TDS including the surcharge, if applicable.
SHE Cess %
Specifies the secondary and higher education CESS rate that is calculated for the TDS amount including the surcharge amount.
Choose the OK button.
See Also
Tasks
How to: Set Up Tax Information for Tax Deducted at Source
How to: Set Up Rounding Options
How to: Set Up Nature of Deductions
How to: Set Up Accounting Periods
How to: Set Up Tax Collection Account Numbers
How to: Set Up Assessee Codes
How to: Set Up Temporary Vendors and Customers
How to: Set Up Concessional Codes
How to: Set Up Correction Types
How to: Set Up Nature of Collection Lines
Concepts
Other Resources
G/L Account
Setting Up G/L Accounts in the Chart of Accounts Window
Chart of Accounts
No. Series