TDS/TCS in D365

hi everyone today our topic is about TDS and how we can set up and I hope we can

achieve our output in the 365 customer requirement in d360 file that is our

today's topic it is very important to know about taxes related topics so

that's why I I have taken this topic for our explanation today

so let's get started uh first of all

so TDs is nothing but tax did it directed at source so that means tax

supposed to be directed at the point of source of income income wherever the

income is generating at that place only tax supposed to be

deleted that is the concept of TDS and we have tax collectors uh from

Source TCS as well they there are uh both are in similar

uh setups only so I'll go with the TDS now

so first of all to do these setups the first prerequisites is that activate TDS

in the GL parameters that is the first step we need to uh do in the system to

perform the TDS activity this is our prerequisite first and let's configure

other related stuff relating to the TDS now

so I went to tax module and in the tax module we have option called withholding

tax Authority so in the withholding tax Authority see

it is already created so I am taking the same example not going to create new

Authority so Authority is nothing but to whom we need

to pay here in d365 see for example tax

is calculated for one of the invoice and that tax supposed to pay to the tax

department right so for that purpose in d365 will create the tax Authority and

will assign one vendor account so without vendor how we can pay uh the

amount right so that's why we'll create one vendor for tax purpose and for that

vendor will pay our tax amounts okay

that is the concept of concept because of that we need to create the

withholding taxes already it is just very simple thing uh let's take new and

provide the name of the authority and description and link your vendor account

which is responsible for the tax transactions okay

so this is the first step and second step is not the second step

in the text configuration is uh settlement periods withholding tax

settlement periods

so here we need to select the type of the tags and we need to create the tax

settlement periods uh tax settlement periods why it is useful is that

normally in or in the organizations they will clear

the tax and that means they will settle the tax in a particular period of

interval so normally it is monthly basis most of the cases so they will create

monthly periods and creating is creating the withholding tax

periods is not a challenging thing just provide the name or description and

which authority you need to uh you are creating this settlement periods and uh

period in travel months or EOS or all and number of units here

so here we need we have selected months and number of units one so that's why

every one month is considered as a unit this is the second step

okay in the third step we have in three days

we have different different sections as per uh Indian tax law let me show you

few things for contract to post one percent of rate

194 C1 section 194 J TDS

sections list

and rates

okay so if I go with this 192 is first always it will go with the slab raids

192 a it is EPF withhold 10 percent of tax

and we have 194 payment of dividend there

are many sections which where we need to pay the TDS and it is

it will be in difference in scenarios interest issued by Banks so post office

is on deposits it is considered with

some conditions and the percentage of tax supposed to be directed these are the

sections you can go through with this in Google and next uh for this purpose we need to

create the withholding tag component group and components code so withholding

tax component group and uh group or code we need to create it

so and uh this one withholding tax group for

example it is contract one one topic for example here I'll explain this

one contract is the group and TDs is this Income Tax Act you can provide that

tax sorry section details as well 194 or something

else which is applicable for that and

after creating the group here we need to assign the tax codes after you have

created the after you have created the um

tax codes so Tax Group I have shown you and after Tax Group there is one more

section called withholding tax codes where we'll provide the tax codes where

we will create the tax code for uh tax code values for the group level for

example this is the withholding tax group we have selected contract and name

currency and what is the main account and what is the main account this is uh

payables account TDS payable and this is receivable account type withholding tax

compound and just we have created that means just I shown you before this step

it is contract and if you want to see the values click

on the values that means values in the sense tax codes

create a tax code and provide the value here

you you have provided the values here and this is the tax code contract

purpose we have created and component is contract we have provided all the

information like settlement period for this tax code and

what is the payable account and receivable account which component are

this particular tags belongs to tax code belongs to

if you see here uh contract these are the uh mostly

say this to contract TD and contract comes under the same tax X component

where you can see this text component here

this will fall under the contract

okay so you can check from here as well withholding tax groups for this

particular group what are the tax codes assigned for this particular group

so these are the major steps first step is GL parameters we need to enable the

TDS stuff in the sales tax Tab and

configuration for DDS is that tax Module come to tax module and create the

withholding tax Authority after withholding tax Authority create

settlement periods and withholding tax component and codes component group

sorry withhold LinkedIn X component group and codes and you can provide the

values what is the rate and how much rate it's supposed to be calculated one

more thing I want to show if it is with um

with pan or without pen you have that option as well in the

values uh how much tax supposed to be calculated value is 2 plus 2 and pawn

non-availability five percent if Pawn is um pan card is not there it will be five

percentage of tax

okay

so if you come to withholding tax group we have contract and we have designer

here we have designer here

if you click on design now

you can add component to calculate the TDS you can add these components are

like how much uh what is the calculation formula or something like that so

contract grows amount and contract says we need to include to the

contract value and contract this is the calculation purpose we are providing the

expression uh how your tax supposed to be calculated

okay

once that is done we we have one more

mapping like 10 number for all the addresses which will be used in the

transaction posting So Tan number we need to map uh it is this can be done in

the legal entity or the site or Warehouse address

takes him for under the tax information you can provide that

maybe I'll show you the legal entity level

of where we can do that um

so organization Administration legal entities

um yeah advanced

in the address form I just clicked on more options and

selected advanced

here you can see the tax details

text details under

this is map

here I guess in the withholding tax step

this is the 10 number we I was into this particular legal entity and there is one

more tan number for the same legal entity as well

so under tax information once this is done

we have one more mandatory step in the master forms if it is a customer

or vendor we have option in the master level

so I'm proceeding with the windows so I'll show you in the vendor moisture

so for example I'll take this one

first one um

so under invoice tab

edit

click on this withholding tags enabled if you disable this

Maybe select contract so we are proceeding with contract now

TDS group

okay once you select this

now testing part uh this uh the configuration setups

let's go with the testing port

okay let's take one more new invoice Journal

foreign

line let me take the

vendor that we have set up the Tax Group sorry TDS group this is the

vendor and let me take the invoice date as today's date maybe I'll take invit t

not giving anything 1000 I am providing as

sorry it's a vendor and once right

and

offset account maybe some expense I'll take it

I don't think so of a contract some any account is there or not

but I'll take some rent account or something

uh

from here

okay for example rent expense only a paid and

let me add the column

Maybe TDS

group this is a column I want so I just adding the column

so contract automatically it's came

foreign

see here you can check the G sorry

10 number as well from near company stand number and then

withholding tax okay and you can click OK after checking this

now let me pause the invoice after that I'll

show the uh I'll show you

the virtual transactions which are posted for this invoice and TDS now you

can check uh vendor how much We are booking thousand thousand is the expense

okay what is that account we've provided rent account rent account thousand

to its tax when TD is payable

okay TDS payable how much maybe five percent

I guess uh on five thousand five thousand means it

is one thousand ten thousand fifty uh two window

950. it's supposed to book like that

let's check the voucher after posting

it's taking time

oh it's taking more than two minutes

I don't know really what happened with the system

is it my network issue or

okay with

hold on it's taking too much time

I think it's already posted it is not there in unposted transactions

yeah done let's check the voucher

see see

okay it's thousand is run David and

977. why because the contract the contract is

having calculation of this calculation expression we have provided right

so these are this is the calculation so contract this is anyway I guess

two percent 20 and onto two percent

charges service surcharge if you go here

you can check the service charge and how much and what is

the other calculations um

say contract right so contract uh

10 percent on 20 10 percent means 2.06 something

like that okay so you can check here uh the calculations we have uh

provided for the uh contract if you go to sales tax oh

and not in the code I think design

this is the contract and Design see here

education contract says what is this this code

how much if you want to check the value click on this value

how much two percent and uh let's check other as well

contract secondary says

value it's one percent

and contract surcharge I guess this is

so it's ten percent

calculation expression is contract uh contract says contract

secondary education skills so it will be calculated based on those

three those three in the sense

say 20 let me take calculator

so that you'll understand better

so 20 plus

and the 0.2 Plus

0.4 into 10

percent sorry 10 percent

2.06 2.06 is the contract surcharge

value so like that it will calculate based on your expression I think

you understood once once this is posted

posted withholding withhold tax you can check it out here

these are the taxes sorry ten thousand twenty percent and

20.06 10 percent ten percent and 20

one percent and twenty two percent this is your overall tax calculation

if you want to settle this withholding withholding tax which was already which

was posted you can do this uh inquiry sample codes

and in the tax module inquiries and reports

and withholding tax transactions where it is

this one

thank you

okay if you want to see these transactions

with whole transactions

uh you can provide filters because it will

take more time if you provide all the details let's take only when one vendor

which we have posted tags

I don't know for every step it is taking processing

okay

okay and before the a this is anyway it will load maybe meanwhile I'll proceed

with uh other thing so um during the month end based on your

settlement period uh particular team will run the

tax settlements so under declaration we have

tax settlement option withholding tax and

withholding tax payment

loading so let's go with settlement

won't happen

so here

foreign

oh first keep on loading

foreign

the concept so that you can practice in your system uh

once this is declaration is completed uh how system will behave is that what is

the entry posted and uh how it what is the concept behind this so we are

settling the uh tax transactions to their Authority so

at that time that previously we have seen the previous voucher while we are

posting the invoice so in the invoice it's a rent account debit and your

vendor credit and remaining tax calculations it has been

posted okay for example we are clearing our tags so it's supposed to go to

particular tax department previously tax DD is payable it has been posted once uh

it is TDS payable it's posted now once the once your declaration oh it's opened

let's take

hmm

it's not going down

okay I'll explain that same thing so once it is declaration

performed once the once you once the Declaration completed text declaration

then entry will be like um your this

what is that tax Authority vendor we have assigned right for the tax Authority uh it will be credited and

you will TDS payable account will be debited once

you've done the payment to your tax Authority then it will be your vendor

debited and your bank um in not your vendor tax Authority vendor will be debited and the bank

account or the mode of payment will be credited

so this is the concept behind this so

I'll maybe I'll show you in different video session

or maybe you can practice uh in your systems

so let me try once if it works

then okay if it doesn't work then you try with

your system I'll give the date from Dayton

settlement period does not exist okay

settlement periods

let's try with this new period

oh God newest is 20 only

I'm creating the new periods let's see for

2023 we are doing we posted the invoice in 23 right maybe

okay then far as it will be okay now

it is declaration this one

okay so once this is done we'll go to

windows

okay maybe transactions

oh it's not

okay it's not posted I don't know that's

under declaration where it is

tan number whether it is the same

see this is the one it has been created that 4 30. if you go

to the Watchers this is 22.66 because we have says and surcharge as well right so

that's why so you can check here 20 2.06 0.204

so what is the entry here debited

debited you will uh

debited you will vendor account okay if you see here

this is vendor account debited sorry credited your vendor account and debited your taxes

what is that TDS payables so now we are liable to this vendor of this much

account so we are liable this much among to the tax department

okay so we need to pay to the tax department 22.66

so to do that now we need to do the payment for the

vendor or tags window tax department

so let's take the payment journal one

here entry will be like vendor will be debit previously vendor is credited and

now bank will be credited

system very slow because of that my explanation also uh it is

very

slow and this is the vendor right we have selected

I think so and once this is done click on settle

transactions and it will show you the open transactions which are available

for this window

oh this is the not this is not the one that vendor I guess

this is not the vendor

so tax vendor right so we have selected wrong

this guy

okay so settle transactions

things

normally this tax related there will be three

uh transactions or entries

while booking the invoice it will be expense or something will be debit

vendor will be credit and TDS payable uh withholding tax payable anything it will

be credited so when you when you do the Declaration

a settlement tax settlement it will go to debit which one your TDS payable will

go to debit and your tax Authority on the person The Authority the vendor

uh to whom we will pay this tax amount that will be credited then the liability

arise to this particular Department we need to pay this much amount once that

is done we need to do the payment

to the tax department that is what we are performing now so we have one

liability for this vendor that we are clearing it now

so then after that it will be like uh vendor account vendor means not uh

starting invoice booking vendor this vendor is a tax Authority vendor and

bank will be credited you can select your bank or something

okay

let's post it

okay

foreign

system is not that much speed so

I'll stop here we'll discuss another Topic in another session or another