• Do we need to define Exception every year?

Solution: Yes, it is an annual exercise.

• Do we need to define exception for each vendor?

Solution: Yes, for each of the vendors individually.

• What should be the exception limit?

Solution: 50Lacs for each year, for this year, 3 possible scenarios have been stated. 

1. New Vendor introduced post 1st July: then, Full Exception limit to be assigned i.e. 50L

2. Existing Vendor not crossed billing for 50L: then, 50L - Invoice value raised, to be assigned as exception

3. Existing Vendor already billed above 50L: then, Exception definition not required.

• What should be the period for exception definition in Vendor master?

Solution: The period for exception would be the financial year - 1st April to 31st March

• What should be the TDS Rate in Exception details?

Solution: 0 (Zero) i.e. not TDS should be deducted till this amount, as per rule stated to be applied from 01/07/2021

• What should be TDS rate defined in Section definition?

Solution: 0.1%, per rule stated to be applied from 01/07/2021

• What should be the "Effective From" Date in Section definition?

Solution:  01/07/2021

• Is exception definition mandatory?

Solution:  No

• What if Exception not defined?

Solution:  TDS will be charged on Rate defined in TDS section from first invoice value.

• Unable to change the field Applicable in PO from Yes to No or vice-versa, what to do?

Solution:  Such modification is not allowed at the time of TDS deduction as this data flows from Vendor master. However, you can make the necessary changes in the Vendor master itself.

• TDS name is not displaying any values, what to do?

Solution: Not defined in Vendor Master

• PI is displaying rate as per general rule, not considering Exception. Why? 

Solution: There can be multiple reasons for the above condition - 

1. Exception not defined for Vendor

2. Exception not defined for TDS Name

3. Date range stated in exception is different for Invoice date

4. Exception limit exhausted

• PI is displaying TDS applicable: No, why ?

Solution: TDS Applicable not marked as ticked in vendor master.

• PI saved, but TDS Journal is not displaying, why?

Solution: TDS Journal is created on Release of Invoice (not on saving), please check whether its posted.

• Who are unregistered vendors with respect to TDS?

Solution: PAN number not provided, not filing ITR.

• What is the rate applicable for unregistered vendors?

Solution: 5%

• Created first PI for the year amounting 60lacs. System has charged TDS on total amount instead of 10lacs (after deducting 50lacs of exception value)

Solution: Already mentioned in assumption, that exception limit if crossed in an Invoice, then TDS will be charges on total amount. Differential deduction is not allowed. If required user need to break the invoice into two with respective values 

• How to apply TDS for unregistered vendors in GINESYS?

Solution: Create a TDS source for Unregistered, and tag with vendor. Apply rate in Section definition @5% for the source.

• If an Unregistered vendor later on gets registered then how to apply?

Solution: Need to change the Source name in vendor master, and limit to be revised as per second scenario of third question.

• If the same vendor is providing Services as well as Goods, then how to manage TDS?

  
        Solution: Need to tag TDS Name created for Purchase of Goods in vendor master, along with exception definition. System will automatically treat the goods type of TDS in Purchase Invoice and Service type of TDS in Service Invoice.
  
  

• If a Service vendor was not applicable for TDS, but supplying goods also, then how to manage TDS?
  

       Solution: Vendor should now be marked as TDS Applicable with respective TDS Source in Vendor master. Then either of the behavior can be followed:

Service Name selected should not have any TDS Name provided in master, and while creating service invoice TDS name should not be selected.

OR

TDS Name provided for the service, should be tagged in vendor master with exception limit prescribed for it.

• There are a lot of conflicts over TDS (u/s 194Q) and TCS (u/s 206C), which one to be applied and by whom. Few common questions are -

  •         a: Will TDS be applied on TCS
  •         b: Will TCS be applicable even after TDS is deducted?
  •         c: Can both TDS and TCS be applied on the same transaction?

Solution: TCS is said to be applied on collection, hence should not be applied as charges or deductions in Sales Invoice by the Seller. It is the Buyer who is booking the payment, hence he is liable to deduct the TDS from the total outstanding. If TDS is applied by the buyer, then TCS is not applicable. Both cannot be applied on the same transaction. Below is an illustration for different scenarios on who is liable to apply TDS by Buyer or TCS by Seller.