Let Us Understand this by taking the example:
Suppose Your vendor name is: SQQ INTERNATIONAL LOGISTICS PVT LTD has issued a Tax withholding exemption certificate of limit 50,000, TDS section 194C, Exemption rate: 0.01%, Period : 1Sep 2022 to 28-Feb-2023:
How you can add the certificate in Shipmnts please follow the below steps carefully:
- Go to Network
- Click on All Companies
- Go to Supplier Section
- Search Supplier Name as : SQQ INTERNATIONAL LOGISTICS PVT LTD
- Go to the Payable Exemption Section
- Click on Add New Exemption
- Before Adding Exemption Certificate Tax witholding category should be set at Supplier Master
- The system Will Redirect You to a New Tax Withholding Exemption Form.
- Enter Your Company Name
Fill in the details mentioned on the Exemption Certificate
- Party Type As Supplier
- Enter Supplier Name As SQQ INTERNATIONAL LOGISTICS PVT LTD
- Enter the Exemption certificate number
- Purpose of Issuing Exemption Certificate
- Enter Tan number
- Enter Tax withholding Category
- Enter Exemption
- Exemption Limit
- Certificate Valid from and Valid to date
- Click on Save.
- If You Tick the mark on the No Exemption Limit Checkbox then the system will calculate Tds @ 0.01% rate only whether the expense amount is within 50,000 or above 50,000. Then Click on Save
- If you add more exemption certificate.
- Click on “Add new Exemption.
Once the Exemption certificate is added.
How TDS calculation works please refer below the attached purchase invoice of Supplier: SQQ International Logistics Pvt ltd.
- The system has calculated the TDS amount as per the exemption certificate.