TDS on Purchase of Goods in Sage 300 ERP

By | September 30, 2021

As per new GOI notification, a new TDS section ‘194Q’ has been introduced which states that the buyer/s having turnover exceeding INR 10 crores in the immediate preceding financial year will require to deduct TDS of 0.1% of the purchase value above INR 50 lakhs at the time of payment or credit.

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In this blog, we will discuss in detail about deduction of TDS on Purchase of Goods in Sage 300 ERP.

In Sage 300, we can setup the TDS module in the following manner to meet the requirement. The TDS can be deducted from day 1 for vendors from whom goods are being purchased.

TDS Configuration
To deduct TDS on purchase of goods under section 194Q, following configuration is required:

1. Section Creation : A new section can be created in TDS module by navigating to Tax Deducted at Source > D/T Setup > TDS Section. Please refer to below image.

D/T Section with Threshold checkbox
D/T Section with Threshold checkbox

2. NOD Creation : Create Nature of deduction & define TDS rate. You can create NOD from Tax Deducted at Source > D/T Setup > Nature of Deduction UI.

D/T Nature of Deduction for 194Q Section
D/T Nature of Deduction for 194Q Section

Above NOD can be assigned to respective vendor/s in D/T Party Details.

Deducting TDS on transactions at 0.1%

  • AP Invoice.
  • AP Credit Note & Debit Note.
  • AP Prepayment.
  • AP Miscellaneous. Payment.

Consider an AP Invoice of 50,00,000 INR as shown below.

AP Invoice Entry with Threshold Limit
AP Invoice Entry with Threshold Limit

Points to Consider:

  • This calculation of TDS deduction will be completely based on Vendor & NOD code & fiscal year combination.
  • Same functionality will be applicable on AP Prepayment and AP Misc. payments.

According to section 194Q zero TDS will not be deducted on 50 lakh rupees as the sum didn’t exceed 50 lakhs. By overriding the TDS base from 50 lakhs to 51 lakhs TDS on Goods Purchase functionality will come into role by deducting 0.1% on 1 lakh rupees which is 100 INR.

Please refer to below image:

TDS Calculated when Threshold Limit is Crossed
TDS Calculated when Threshold Limit is Crossed

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