I am receiving payment by cheque with TDS deducted. I have created an expense TDS. While entering the cheques received from the client, I enter the detail of TDS such that the net amount receivable is the cheque amount. This practice was being followed by me before creation of TDS. Now how do I use this feature.
TDS module is still work in progress. I got some implementation details wrong so still working on it. Ask again about TDS in a week or so.
Any updates on the TDS module?
While it is getting ready, is there a workaround?
I’ve done more work on TDS this past week. One of the more significant changes is that I have removed
Tax Deductions at Source tab.
When issuing sales invoice to customer where customer should withhold tax from the payment to you, you can use
Withholding tax field on sales invoice.
You will notice that withholding tax amount will be debited to special account called
Withholding tax receivable while the reminder (to be paid by customer) will be posted to
Withholding tax receivable asset account represents how much your customers owe to tax authority on your behalf.
Once customer sends you proof of payment to tax authority:
- Go to
- Click on amount under
Withholding tax receivablecolumn.
New Receiptbutton and enter how much they have paid to tax authority.
This will transfer amount from
Withholding tax receivable account to
Withholding tax account.
Withholding tax account represents how much have been withheld from you. The amount can be then used to offset your income taxes.
Thanks for the update. I did check the withholding tax section and it seems to be doing things correctly in the case of Indian 10% TDS rate. It correctly, showed net income and tax receivables in my case.
Typically, in India, noone mentions withholding tax on invoice. Therefore I would request you to keep the withholding tax provision. Yes, it should be linked with the TDS module so that later it can be tallied up.
Just one more change expected: There is no rounding off in withholding tax. Typically, withholding tax will be rounded up. It is currently not rounding up and therefore, it shows as a balance in accounts receivable from the client.
I could not find the Withholding tax receivable column on the Customer tab.
Please, could you give an example including the issuing of the invoice and the receiving of the proof of payment?
I am from India. Here, TDS is deducted on Principal amount only (as per the tax rules in India) but “Withholding Tax” option is deducting tax also on the VAT & Service Tax i.e. complete invoice amount.
Please help to address this problem or guide me on this subject.
Withholding tax feature is still work in progress and not suitable to all countries yet.
Hi from Greece.
The “withholding” feature is outstanding.
I have to make though, some suggestions for improvement.
Here in Greece the withholding from my customers is applied to the amount without taxes.
Amount: 1.000 euros
Tax 23%: 1.000 X 0,23 = 230 euros
TOTAL amount of Invoice: 1.000 + 230 = 1.230 euros
The amount that I will be paid for 20% withholding: 1000 - (20% x 1000) + 230 = 1.030 euros
Also I wish the “withholding” feature will be as an option in purchace invoices, because in some cases, I have to withhold to my suppliers.
Thank’s in advance.
P.S. I have a small construction company.
Hi, any update on Withholding Tax…
You can specify the actual amount being deducted instead of using %. It works fine that way.