Go to Settings, then Taxes, and enable TDS. Zoho Books provides a list of standard TDS sections from the Income Tax Act: 194A (interest), 194C (contractors), 194D (insurance commission), 194H (commission), 194I (rent), 194J (professional fees), 194Q (purchase of goods), and others. For each applicable section, the rate is pre-configured but can be adjusted if the vendor has a lower deduction certificate (Form 13). Assign the relevant TDS section to each vendor record.
When you record a bill from a TDS-applicable vendor, Zoho Books shows the TDS section and calculated TDS amount. The bill entry debits the expense account for the full bill amount, credits Accounts Payable for the net amount (bill minus TDS), and credits TDS Payable for the deducted amount. When you make the payment, you pay only the net amount to the vendor and separately deposit the TDS amount to the government via an online challan.
Zoho Books generates several TDS reports: the TDS Summary shows total TDS deducted by section for a period, the TDS Payable report shows the amount due to be deposited, and the TDS Detail report shows each transaction with the amount deducted. These reports feed into Form 26Q (TDS on non-salary payments), which your CA files quarterly. Zoho Books exports the data in the format required for 26Q preparation.
TDS (Tax Deducted at Source) in Zoho Books is the mechanism by which a business deducts income tax from vendor payments for specified categories and remits it to the Income Tax department on behalf of the vendor.
Go to Settings, then Taxes, enable TDS, add applicable TDS sections with rates, and assign the relevant section to each vendor. Zoho Books then automatically calculates and deducts TDS when you record bills for those vendors.
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