Handling Tax Deducted At Source (TDS) on Rent Paid in Sage ACCPAC ERP.

By | August 30, 2011
Query: How to book Rent expense entry after deducting Tax Deducted at Source (TDS) in Sage ACCPAC ERP?Solution: By using Greytrix TDS (Tax deducted at Source) for Sage ACCPAC ERP.
Read MoreAs TDS is applicable on Service Type Transactions, we can apply the same on Rent also. TDS is paid by the consumer to government on behalf of Vendor. However, according to the clarification by CBDT, Service tax should not be included in the base amount for calculation of TDS.
Please refer to the link for details.
http://www.simpletaxindia.org/2008/05/tds-on-rent-194-i-not-including-service.htmlProcedure: When we want to deduct TDS on Rent, please add particular vendor’s name in TDS Vendor master.
Path:
Tax Deducted at Source > DT Setup > Party Details, selecting Nature of Deduction for Rent
From Accounts payable module, create an invoice for Rent payment.
When you select Vendor to whom you have to pay rent, in Invoice screen, View TDS button is enable (Button enables only if you have entered respective vendor’s name in TDS Vendor Master (Path : Tax Deducted at Source >DT Setup > Party Details , selecting Nature of Deduction for Rent)
Select Document type as Invoice , enter the document no, enter total amount of Rent in Document Total field, select appropriate Rent Expense GL Account, Click on View TDS Button, based on the TDS percentage defined in Nature of Deduction master, we can see the TDS amt to be deducted.
Save the Invoice entry.
Whenever we create transaction entry of Invoice, prepayment or misc payment; automatically the adjustment entry on that document gets created with the TDS Amount in Adjustment entry screen, which is TDS entry.
Post the adjustment entry.
Remittance Entry: Remittance sequence is after posting Invoice and Adjustment Entry. We make the remittance entry after deducting TDS Amount from Vendor’s Invoice or Prepayments.