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TDS Tax codes

Hi

Dear friends, please tell me why do we require two type of tax codes in TDS like tax code for invoice posting & tax code for payment. Please explain briefly the scenario for each case.

Regards

Former Member
Former Member replied

Hi ,

You need not select the tax codes for TDS like what we are doing for input tax or out put tax ( Sales Tax Excise Etc...)

1. You are creating tax codes for both payment (Let it be P) & invoice ( Let it be I ) and the calculation is entered there in tax code ( Pls note tax codes are created according to the income tax sections for TDS )

2.Then we assign taxcodes P & I in vendor master ( vendor X )

3.When we book down payment(Pls Note Down payment will be made through splcial gl indicator) to X it will automatically deduct the TDS in accordance with tax code P

4.Now lets come to the invoice for the same DP made at this point when we make the invoice recipt of the X it will automatically gives a pop up that down payment xxxx is made and then it will knock of the effect of down payment and will calculate TDS on the net payemnt @ invoice using tax code I

Hope now the process is clear

Regards

Arun

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