TDS Tax codes
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.
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