TDS and TCS

Deduct TDS on bills, collect TCS on invoices, record the TDS your customers deduct, and get the TDS / TCS report for your returns.

TDS and TCS are part of the Standard plan and above.

Set a party's usual TDS or TCS

1. Open the party and click Edit.
2. Open TDS / TCS.
3. For a supplier, choose TDS on their bills: the section, such as 194C - Contractors and job work or 194J(b) - Professional fees. Change Their rate % if it isn't the usual one, for example 1% for an individual contractor or 20% without a PAN.
4. For a customer, choose TCS on your invoices to them if you collect TCS from them.
5. Save.

New bills and invoices for the party then start with that section and rate.

TDS on a purchase bill

On the bill, TDS to deduct shows the party's section. Check the Rate % and the amount it is worked out On amount (usually the value before GST), or choose No TDS for this bill.

When you save:

• the supplier is owed the bill total less the TDS
• the TDS goes to TDS Payable, to be paid to the government
• the bill shows the TDS, and its balance is the amount you still have to pay the supplier

TCS on a sales invoice

On the invoice, TCS to collect adds TCS to the total the customer pays. It goes to TCS Payable.

TDS your customer deducted

When a customer pays you less because they deducted TDS:

1. Record the payment as usual (Payment In).
2. Open Customer deducted TDS? and enter the TDS deducted and, if you know it, the Section.
3. Choose the invoices it settles.

The invoices are settled by what you received plus the TDS. The TDS goes to TDS Receivable: check it against your Form 26AS before you claim it.

The TDS / TCS report

Go to Reports › TDS & TCS and choose the period. It lists, section by section:

• TDS you deducted on bills, with the supplier's PAN
• TDS your customers deducted
• TCS you collected

Use it for your challans and your TDS / TCS returns.