AX 2012 R2 CU7 Sample India TDS Setup for 194C Contract for company with threshold and accumulative

In this example following is real scenario to setup TDS 194C for contract (company) in year 2014:

• If PAN status is "not available" or "not received" yet then the TDS rate is 20% . See sample A below.
• If PAN status is "Received" then
• If single invoice more than 30,000 Rs then TDS rate is 2% . See sample B below.
• If single invoice less than 30,000 Rs then calculate cumulative invoice amount within current fiscal year for the vendor. 
• If cumulative is  <=75,000 Rs per annum then TDS rate is 0%. See sample C below.
• If cumulative is > 75,000 Rs per annum then TDS rate is 2%. Note the first invoice which make the cumulative reach threshold of 75K, will recalculate TDS for previous non-taxed invoices. (See sample D below)

Sample A:

Vendor AXE000A,PAN information status is "Not available".
8 Jan 2014 there is invoice INV001 1000 Rs. So the rate for TDS should be 20% * 700 = 140 Rs.

Sample B:

Vendor AXE000B, PAN information status is "Received".
8 Jan 2014 Invoice# INV002, amount 32,000.00 Rs. TDS tax amount = 2% * 32,000 = 640 Rs

Sample C & D:

Vendor AXE0001, PAN information status is "Received".
1st Jan 2014 Invoice# INV003, amount 10,000.00 Rs. TDS tax amount = 0% * 10,000 = 0        Rs (10K p.a.)
2nd Jan 2014 Invoice# INV004, amount 20,000.00 Rs. TDS tax amount = 0% * 20,000 = 0        Rs.(30K p.a.)
3rd Jan 2014 Invoice# INV005, amount 25,000.00 Rs. TDS tax amount = 0% * 25,000 = 0        Rs.(55K p.a.)
4th Jan 2014 Invoice# INV006, amount 25,000.00 Rs. TDS tax amount = 2% * 80,000 = 1600     Rs (80K p.a.)
5th Jan 2014 Invoice# INV007, amount 20,000,00 Rs. TDS tax amount = 2% * 20,000 =  400     Rs (100 p.a.)

TDS Setup for 194C Contract Company step by step :

If you don't understand this steps, refer to following msdn:

http://technet.microsoft.com/en-us/library/dn527712.aspx

1. GL parameter>Activate TDS

2. GL>set up>Withholding tax>India>Withholding tax component group

3. GL>set up>Withholding tax>India>Withholding tax component

4. GL>set up>Witholding tax code

4.1 GL>Set up>Threshold definition

Create structure like below for 2014.

4.2. GL>Set up>Withholding tax code>>Threshold reference button>>Designer button.

5. GL>Set up>Withholding tax group

5.1 GL> Set up >Withholding tax group>>Designer button

6. AP>All vendor>>Invoice and delivery tab>>Tick calculate TDS and TDS group.

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