4341 views Overview
Munim enables you to configure Tax Deducted at Source (TDS) for applicable vendors and record deductions automatically within purchase bills and expenses. Please note that Section 194Q is exclusively available for purchase bills, while all other sections are applicable to expense transactions.
Benefits
- Configure TDS details for the business.
- Enable TDS for specific vendors.
- Automatically calculate TDS in purchase bills and expenses.
- Review recorded TDS through the TDS Report.
Step 1: Enable TDS in General Settings
- Navigate to Settings > Statutory Information > TDS Details. Here, click on the Edit option.
- In the edit mode, find the option Enable tax deducted at source (TDS)? and select Yes.
- Fill in the required statutory details such as TAN, Deductor Type, etc.
- You may choose from Apply TDS on Section 194Q to either the Sub Total or the Total Taxable Amount.
- Click Save to apply changes.
Note: Only one TDS Section 194Q is exclusively available for Purchase Bills, while all other sections are applicable to Expense transactions.
Step 2: Enable TDS for a Vendor
- Now you have to enable TDS for particular vendors. For that, Go to Account Master > Account.
- Find and click Edit for the respective vendor.
- In the statutory information section, enable Set / alter statutory information? by selecting Yes.
- Here, enable the option Is TDS deductible? by selecting Yes.
- Select the Deductee Type and enter the Existing Turnover (applicable only for Purchase Bill (sec.194Q)).
- Click Save to confirm.
Step 3: Apply TDS in Purchase Bills
- While creating a Purchase Bill, select the TDS-enabled vendor.
- In the bill entry form, the default TDS section for Purchase Bill, Section 194Q will automatically apply the relevant TDS rate.
- TDS will be automatically calculated and reflected in the transaction. Save the bill.
- You can check its details in the TDS report in the Reports module.
Step 4: Apply TDS in Expenses
- While creating an Expense, select the TDS-enabled vendor first.
- In the Expense selection field, click on +Add New Expense if you are creating a new expense type.
- In the Expense details, add required fields and go to the TDS section dropdown and select the valid section based on the type of expense.
- Save the entry. TDS will be calculated automatically for that transaction according to the threshold rule.
- You can check its details in the TDS report in the Reports module.
Step 5: View TDS Reports
- Navigate to Reports > Statutory Report > TDS Report.
- Here, you can view a detailed report of all TDS deductions, including vendor details, section, rate, and amount deducted.
Commonly Used TDS Sections (with Thresholds and Rate)
| Section Code | Nature of Transaction | TDS Rate | Annual Threshold Limit |
|---|---|---|---|
| Section 194O | Payment or credit of amount by e-commerce operators to participants | 0.10% | ₹5,00,000 |
| Section 194D | Insurance commission | 5% (Individuals) 10% (Companies) | ₹20,000 |
| Section 194G | Commission, etc., on sale of lottery tickets | 2% | ₹20,000 |
| Section 194H | Commission or brokerage | 2% | ₹20,000 |
| Section 194J(b) | Fees for professional services (Others) | 10% | ₹50,000 |
| Section 194J(a) | Fees for Royalty or technical services | 2% | ₹50,000 |
| Section 194I-b | Rent – Land or building or furniture | 10% | ₹6,00,000 |
| Section 194I-a | Rent – Plant and Machinery | 2% | ₹6,00,000 |
| Section 194C | Payment to contractor/sub-contractor | 1% (Individual/HUF) 2% (Others) | ₹30,000 (Single transaction) ₹1,00,000 (Aggregate FY) |
| Section 194A | Interest other than “Interest on securities” | 10% | ₹50,00,000 (Senior Citizens) ₹50,000 (Others from Bank/PO) |
*The provided rates are illustrative and are subject to modification based on the most recent government notifications. It is essential to verify the rates prior to their application.
Note: If the payee/vendor does not provide a valid PAN, tax will be deducted at a higher rate as per the rule.
Important Notes
- Existing transactions remain unaffected; TDS applies only to new entries.
- Always cross-check the correct section and threshold before applying.
- If a vendor’s turnover is below the threshold, TDS will not be deducted in Purchase Bill.
- You can create a Purchase Bill with the TDS section 194Q only
- Reports can be downloaded for filing and compliance.
Need Support?
By following these steps, you can fully comply with TDS requirements while managing accounts in Munim. For additional assistance, reach out to Munim support.
