A TDS Transaction is one row of the withholding register: one deduction of TDS or one collection of TCS, recorded when a bill, invoice, payment, receipt or note is posted. You don't type these rows. Posting writes them, and you read them to see what was deducted from whom, under which section and at what rate. The register sits between the documents and the statutory steps that follow. Monthly challans are drafted from it, quarterly returns are computed from it, and certificates stamp their numbers back onto it. The whole cycle is described in TDS & TCS.
Overview
Each row records:
- What it came from: Source Entity Name (Bill, Invoice, CreditNote or DebitNote), the document's number and date, and the party (vendor or customer) with the PAN held on the party's account at posting.
- What was assessed: the TDS section row used, its Section Code and Payment Code, the Transaction Amount, the Taxable Base, the Rate and the Tax Amount, and a Remarks Code when a lower deduction certificate or the no-PAN rate applied.
- Where it stands: Status (Computed, Deposited or Reversed), the fiscal year, the withholding journal (GL) and the Certificate Number.
Nature tells TDS from TCS. TDS rows go to the Form 140 return, and TCS rows go to the Form 143 return.
When to use it
- After posting a bill or invoice with a TDS or TCS section, open the register to confirm that the deduction was taken, at the expected rate and on the expected base.
- Before drafting a month's challans, review the rows that are still Computed for that month. These are what drafting picks up.
- When a return's validation flags a deductee row (missing PAN, wrong section, not deposited), find the deduction here and check its PAN, section and status.
- When a vendor or customer queries a deduction, find the row by document number or party, and quote its challan or certificate reference.
- When working out why a later bill deducted nothing, add up the party's rows for that section and year, because the annual threshold counts only these rows.
How xMatix handles it
Where the rows come from
| What you post | When the row is written | Source Entity Name | Amounts |
|---|---|---|---|
| A bill with a TDS section on its lines | At posting, or when a payment settles the bill, depending on the section's Deduction Point. Written once per bill and section. | Bill | Positive |
| A bill's TDS Amount Override, re-posted with Post TDS | Replaces the bill's earlier rows (they become Reversed) with a row at the override amount | Bill | Positive |
| An invoice with a TCS section on its lines | At invoice posting or when a receipt is posted against it, depending on the Deduction Point | Invoice | Positive, Nature TCS |
| An invoice with a TDS section on its lines (TDS your customer deducts from you) | At invoice posting or at receipt, depending on the Finance setting Withholding tax on receivables is recognised at | Invoice | Positive, Nature TDS |
| A receipt applied to an invoice with a Withheld Tax Amount | When the receipt's application is posted | Invoice | Positive, Nature TDS, with no section, base or rate |
| A credit note against a bill or invoice that carried TDS | At credit note posting | CreditNote | Negative, at the original row's rate |
| A debit note that names a bill | At debit note posting | DebitNote | Negative, at the bill row's rate |
Payroll writes no rows here. Salary TDS reaches the salary return straight from payroll.
When a row is written, xMatix also posts a withholding journal and links it in the GL field. A TDS row on a bill debits Accounts Payable and credits TDS Payable. A TCS row debits Accounts Receivable and credits TCS Payable. Customer-deducted TDS debits TDS Receivable and credits Accounts Receivable. A TCS row collected through a Document Tax Slot has no journal of its own and links to the invoice's journal. A nil-certificate row (remarks code B) records zero tax and posts no journal.
Rows are named from the TDS Transaction numbering series: prefix TT, the date the row was saved and a six-digit number.
Status
| Status | Meaning | Set by |
|---|---|---|
| Computed | Deducted or collected, not yet deposited | Every new row |
| Deposited | Covered by a deposited challan | Deposit Challan on the challan that holds the row |
| Reversed | Taken out of the register's totals | A bill override re-post (for the rows it replaces), cancelling an invoice (for its TCS rows and receipt-withheld rows), or reversing a receipt's withholding |
Nothing moves a row back to Computed. Credit and debit notes do not change the original row's status. They add a negative row, and the original and the reversal are netted on the return.
Cancelling an invoice reverses the journal of the TDS your customer deducted, but its TDS rows stay Computed. Only TCS rows and receipt-withheld rows are marked Reversed.
Certificate Number
When a challan is deposited, xMatix writes the challan's name into the Certificate Number of each covered row that has none. When Generate Certificates runs on a Filed return, it replaces that with the certificate number. After that, the row, the certificate and the deductee's statement all quote the same reference.
Who reads the register
| Step | Rows it uses |
|---|---|
| Threshold check on the next document | The party's rows for the same company, fiscal year and section code that are not Reversed. It adds up Transaction Amount, so negative note rows lower the total. |
| Lower deduction certificate consumption | Each new row's Taxable Base. Negative rows give headroom back. |
| Monthly challan drafting | Computed rows of the company with a Tax Amount above zero, dated in the month and not yet on a challan |
| Quarterly return computation | Rows of the company and Nature that are not Reversed, dated in the quarter (or moved to it), with tax above zero or a nil-certificate remark. Computed and Deposited rows both count, and negative rows are netted against the same party and section. |
| TDS Reconciliation (deductor side) | Rows that are not Reversed and have tax above zero, for the financial year and Nature |
| Form 26AS reconciliation | Invoice rows with Nature TDS that are not Reversed (the TDS customers deducted from you) |
| TDS Summary report | Every row that has a section, grouped by section code and company. All statuses are included. |
TDS your customers deducted is not kept apart from TDS you deducted. Both carry Nature TDS and your company. Challan drafting, return computation and the deductor-side reconciliation don't filter on the source, so Invoice rows with Nature TDS can be drafted onto your deposit challans and appear as deductee rows on your Form 140 return. Before you deposit a challan or file a return, check its rows for Source Entity Name Invoice. See Common problems.
Moving a deduction to a later return
If a deduction was deposited but its own quarter's return is already Filed without it, the TDS Reconciliation page offers Move to Next Return. The row then reports in the next open return. Its document date and the books don't change. The page shows such rows as Moved to next return. The quarter they were moved to is not on the register's form.
Prerequisites
- Access to the Finance Setup app (or the tax settings app) and read access to TDS Transaction in your security profile (see Permissions).
- Sections set up in TDS sections, and the TDS Payable, TCS Payable and TDS Receivable control accounts in GL accounts. Without a section on the line, posting writes no row.
- PAN and Deductee Type on each vendor and customer account. The row copies the PAN at posting.
Procedure
Step 1 — Open the register
Open the Finance Setup app and, under Withholding Tax (TDS), open TDS Transaction. The same list is in the tax settings app under TDS Registers. The All TDS Transaction view shows Name, Partner Account, Source Entity Name, Nature, Fiscal Year, Tax Amount, Created By, Party Account, Party PAN, Document Number, Document Date, Section Code, Payment Code, Rate, Status, Remarks Code and Certificate Number.
Step 2 — Find a deduction
- For one document: search the list for the document number. Bills are recorded under the supplier's invoice number when the bill has one, and under the bill's own name otherwise.
- For a month's undeposited tax: filter Status Computed and Document Date within the month. Add Nature to separate TDS from TCS.
- For a party: filter Party Account, and add Section Code to see what counts towards that section's annual threshold.
The list shows the party's company as Partner Account. On a tenant with only one company, that column and the form's company fields may be hidden.
Step 3 — Read the record
Select a row's name. The header shows Section Code, Payment Code, Rate, Tax Amount and Status. The record has three tabs:
- Source: Name, Source Entity Name, Document Number, Document Date, Nature, Party Account, Party PAN, PAN Available and Deduction Date.
- Assessment: Section Code, Payment Code, TDS Section, Transaction Amount, Taxable Base, Rate, Tax Amount, Remarks Code and Lower Deduction Certificate.
- Lifecycle: Fiscal Year, Fiscal Period, Status, Certificate Number, Branch and GL.
Open GL to see the withholding journal. Tax Amount is Taxable Base × Rate ÷ 100, rounded to two decimals. Rate is a percentage, even though the form shows a currency sign in front of it.
Step 4 — Follow it to the challan and the return
- Challan: open the challan named in Certificate Number (before certificates are generated), or open the month's challan in TDS challans. Its allocations list the rows it covers.
- Return: open the quarter's return in TDS returns. Each deductee row links back to its TDS Transaction.
- Reconciliation: on the TDS Reconciliation page in the Tax Center, a deduction that is on no challan can be sent to one with Allocate to Next Challan. This drafts challans for the deduction's whole month, not just this row.
Step 5 — Correct a deduction
Correct the document, not the register row. Nothing recomputes when a row is edited.
- Wrong amount on a bill: enter the right figure in the bill's TDS Amount Override and run Post TDS. The old rows are Reversed and a new row and journal are posted. Neither field is on the shipped bill page, so an administrator adds them first (see Bills). This is refused once a row is on any challan (Draft included), is Deposited, has a Certificate Number, or is in a Filed return.
- Credit given to the vendor or customer: post a credit note against the bill or invoice. It writes a negative row, and the return nets it.
- Wrong PAN on a posted row: correct the PAN on the account for future documents, then edit Party PAN on the row in place. Recomputing the return reads the PAN from the row, not from the account.
- Deduction already in a Filed return: use Create Correction on the return (see TDS returns).
Step 6 — Report
Open TDS Summary in the Tax Center app for deductions grouped by section code and company, with party, document date, rate, nature and tax. Add a Status filter if you want to leave Reversed rows out. TCS Summary in the same app is built from invoices and their lines, not from this register.
Fields
Source
| Field | What it means | Notes |
|---|---|---|
| Name | The row's number | From the TT series. Read-only in practice. |
| Source Entity Name | The kind of document that wrote the row | Bill, Invoice, CreditNote or DebitNote |
| Document Number | The document's reference | Bills: the supplier's invoice number, otherwise the bill name. Others: the document's name. |
| Document Date | The date the row counts in | The bill's or payment's posting date, the note's posting date, or the invoice date for TDS a customer deducted. Decides the challan month and the return quarter. |
| Nature | TDS — deducted on payables, or TCS — collected on receivables | Copied from the section. Decides the return (Form 140 or 143). |
| Party Account | The vendor or customer | |
| Party PAN | The PAN on the party's account at posting | The return reports this value. Edit it here to fix a posted deduction. |
| PAN Available | Whether the party had a PAN at posting | Off means the higher no-PAN rate could apply |
| Deduction Date | When the tax was deducted or recognised | Same as Document Date on bill and note rows. On rows for TDS a customer deducted, the invoice or receipt posting date. Used for challan interest. |
Assessment
| Field | What it means | Notes |
|---|---|---|
| Section Code | The section, for example 194C | Copied from the section row. The annual threshold totals by this code. |
| Payment Code | The payment code, for example 1024 | Challans group by it. Empty for older sections. |
| TDS Section | The section row used | It can differ from the line's section when a same-code row was chosen for the date or deductee type. Empty on receipt-withheld rows. |
| Transaction Amount | The document amount assessed for the section | Counts towards the annual threshold |
| Taxable Base | The part that was taxed | The whole amount, or the excess over the annual threshold for sections taxed on the excess |
| Rate | The rate applied, in percent | The section rate, the no-PAN rate, or a certificate's rate. On override rows, tax ÷ base. |
| Tax Amount | Tax deducted or collected | Negative on credit and debit note rows |
| Remarks Code | A — Lower deduction (s.395), B — Nil deduction (s.395), C — Higher rate (PAN missing) | Empty means the normal rate. Reported on the return. |
| Lower Deduction Certificate | The certificate applied | Set with remarks A or B |
Lifecycle
| Field | What it means | Notes |
|---|---|---|
| Fiscal Year | The company's fiscal year covering the posting date | Threshold totals are per fiscal year |
| Fiscal Period | Not filled by posting | Leave empty |
| Status | Computed, Deposited or Reversed | Default Computed. See Status. |
| Certificate Number | The challan name after deposit, then the certificate number | A row with a value here can't be re-posted through an override |
| Branch | The document's branch | |
| GL | The withholding journal | For TCS in a Document Tax Slot, the invoice's journal |
Business Unit and Partner Account are stored but are on no form. Partner Account is the company that withheld, and it appears on the list.
Business rules
- A row is written only for lines with a TDS section, and only when the section's thresholds are reached. Documents below the threshold write nothing.
- One bill and section is deducted once, whichever event comes first. A row that has been Reversed no longer counts for that check.
- Rows are never deleted or recalculated by posting. Later changes add negative rows or mark rows Reversed.
- Edits made by hand are not checked and change nothing else: the journal, the challan allocations and the return rows stay as they were.
- Deposit sets Status to Deposited and fills Certificate Number. Generate Certificates overwrites Certificate Number.
- On the return, a negative row reduces the latest deductions of the same party and section code in the same quarter, never below zero. If the original deduction was reported in an earlier quarter, the negative row reduces nothing, and that earlier quarter needs a correction statement.
- A row stays on the challan it was drafted onto, even if you later change its amount.
- Clone copies a row as a new Computed row, which challans and returns then pick up. Don't clone register rows.
Example
A company posts a bill for 40,000 from a contractor, a firm with a PAN, tagged 194C [1024], on 2 May.
- The bill reaches the 30,000 single threshold, so 2% is deducted. The register gets a row: Source Entity Name Bill, Document Number CW/118 (the supplier's invoice number), Document Date 2 May, Nature TDS, Section Code 194C, Payment Code 1024, Transaction Amount 40,000, Taxable Base 40,000, Rate 2, Tax Amount 800, Status Computed. Its GL is the withholding journal (Accounts Payable 800 debit, TDS Payable 800 credit).
- On 20 May the contractor issues a credit of 5,000, posted as a credit note against the bill. A second row appears: Source Entity Name CreditNote, Transaction Amount −5,000, Tax Amount −100.
- On 1 June the May challans are drafted. The 800 row is allocated to the payment code 1024 challan. The −100 row is not, because only positive Computed rows are drafted.
- On 5 June the challan is deposited. The 800 row becomes Deposited, and its Certificate Number shows the challan's name.
- In July the Q1 return is computed. The contractor's deductee row shows 700, because the credit note's row is netted against the bill's. After filing, Generate Certificates replaces the bill row's Certificate Number with the certificate number.
Training
Practice exercise
In a sandbox company with the statutory catalog provisioned:
- Give a vendor a PAN, Deductee Type Company and Default TDS Section 194C [1024].
- Post a bill of 50,000 for that vendor.
- Open Finance Setup → Withholding Tax (TDS) → TDS Transaction and find the row by its document number.
- Open the row's GL journal.
Expected result: one row with Tax Amount 1,000 at Rate 2 and Status Computed. The journal debits Accounts Payable and credits TDS Payable with 1,000. Now remove the vendor's PAN and post another bill of 50,000. The second row has Rate 20, Tax Amount 10,000, PAN Available off and Remarks Code C.
Quick reference
- Finance Setup → Withholding Tax (TDS) → TDS Transaction, or the tax settings app → TDS Registers.
- Rows are written by posting. Don't create, clone or delete them by hand.
- Computed rows with positive tax are what the next challan drafts.
- Deposited comes from Deposit Challan. Nothing sets a row back to Computed.
- Notes add negative rows; the return nets them.
- Certificate Number: the challan name after deposit, then the certificate number.
- Fix a PAN on a posted deduction by editing Party PAN on the row.
- Fix an amount through the bill's TDS Amount Override and Post TDS, before the row is on a challan.
- Check for Invoice rows with Nature TDS on your challans and returns.
Permissions
New, Edit and Delete follow the TDS Transaction entity permission in the user's security profile. The shipped System Admin, Standard User and Sales Executive profiles have full access to the entity. All three have the Edit, Delete and Clone actions, and System Admin and Standard User also have New.
The Finance Setup app is visible to the System Admin, Standard User and Sales Manager profiles, and the tax settings app to System Admin only. A user without either app does not see the register in the menu. See why a user can't see something.
Posting writes rows under the poster's own permissions, so people who post bills and invoices need no register permissions. Because hand edits flow into challans and returns unchecked, consider making the register read-only for everyone except finance administrators.
Configuration
- Where the list appears: Finance Setup → Withholding Tax (TDS), and the tax settings app → TDS Registers. Move or hide it in Setup → Design Studio → Apps → Manage Items.
- Numbering: the TDS Transaction document name setting (series TT, six digits). See the Document Name Setting reference.
- What gets deducted: the TDS sections master, each account's PAN, Deductee Type, TDS Applicable and Default TDS Section, and lower deduction certificates.
- When customer TDS is recorded: Setup → Feature Hub → Administration → Module Settings → Finance → Withholding tax on receivables is recognised at, with a per-company override in Org Settings → Companies.
- Control accounts: TDS Payable, TCS Payable and TDS Receivable in GL accounts.
- Read-only register: limit Edit, Delete, New and Clone on TDS Transaction in security profiles.
Common problems
A bill posted but has no row in the register
The line had no section, the vendor's TDS Applicable is off, the amount stayed below the section's thresholds, the section has no row in force on the posting date, or the section's Deduction Point is At payment / receipt and no payment has settled the bill yet. See TDS sections.
TDS that a customer deducted from us is on our challan or our return
Rows for customer-deducted TDS carry Nature TDS and your company, and drafting and return computation don't separate them by source. Look for Source Entity Name Invoice among the deductions on the challan's Deductions tab and the return's deductee rows. The shipped screens have no action that takes a deduction off a challan, so check the month's Computed rows before challans are drafted, and make sure the deposit and the filed statement cover only tax your company deducted. Don't set the row to Reversed to hide it: that also drops it from the Form 26AS comparison.
An invoice was cancelled but its TDS row is still Computed
Cancelling reverses the journal, but marks only TCS rows and receipt-withheld rows Reversed. Rows for TDS a customer deducted stay Computed. Check them before drafting the month's challans.
The return shows an old PAN for a vendor
The return reads the PAN stored on the row at posting. Edit Party PAN on each affected row, then recompute the return.
"the TDS posted on it is already on a TDS challan (deposited or allocated for deposit)"
The bill's override re-post is refused because a row is on a challan, is Deposited or has a Certificate Number. The shipped screens can't take a deduction off a challan, so adjust with a credit note against the bill instead.
"the TDS posted on it is reported in the Filed return"
The deduction is in a Filed return, so re-posting would change a filed statement. Use Create Correction on the return.
I deleted or reversed a row by hand and the bill deducted again
The bill's journal stayed posted, but the next payment or Post TDS found no live row for the bill and section, so it deducted again. Reverse the duplicate journal, and in future correct the document instead of the row.
The Fiscal Period column is empty
Posting fills Fiscal Year only. Use Document Date to filter by month.
Common questions
Can I enter a TDS deduction by hand?
You can create a row with New, but it has no journal behind it, so your TDS Payable balance won't include it. If it carries your company and Status Computed with positive tax, the next challan drafts it and the return reports it. Post a bill (or a bill's TDS Amount Override) instead, so the books and the register agree. If you must record a manual journal for withholding, remember that it never reaches the register, the challan or the return.
Why is the credit-note row not on any challan?
Challans draft only rows with positive tax. A credit note's negative row lowers the party's annual threshold total and is netted on the quarterly return, but it doesn't reduce a challan. A challan pays the tax of the positive rows it holds, as they were when it was drafted.
What does Deposited actually prove?
That a challan covering the row went through Deposit Challan, which posted the bank payment and computed interest. It doesn't prove the challan's CIN was checked against the portal. Verify that on the challan (see TDS challans).
Does editing a row change the books?
No. The journal, the challan and any return rows keep their own figures. A hand edit changes only what later steps read: drafting, the next threshold check, and a recompute of an unfiled return.
Related topics
- TDS & TCS — the whole withholding cycle.
- TDS sections — rates, thresholds and deduction points.
- TDS challans, TDS returns and TDS certificates — where the rows go next.
- TDS reconciliation — books against returns, challans and Form 26AS.
- Lower deduction certificates — remarks codes A and B.
- Bills — TDS Amount Override and Post TDS.
- TDS Transaction entity reference.