How to Setup Lower rate TDS for Vendors in ERP system using Sage 300cloud

What is TDS at a lower rate?

• With effect from 14th May 2020, the government has reduced Tax deduction at source (TDS) rates for interest, dividend, professional fees, rent payments, and other non-salaried payments by 25%

Who can apply for a lower deduction certificate?

• Where the Assessing Officer, on an application made by a person under sub-rule (1) of rule 28 is satisfied that the existing and estimated tax liability of a person justifies the deduction of tax at a lower rate or no deduction of tax, as the case may be, the Assessing Officer shall issue a certificate in accordance with the provisions of sub-section (1) of section 197 for deduction of tax at such lower rate or no deduction of tax.

Who can apply for a lower deduction of TDS?

• While any person including corporates can make section 197 application, in case of certain specified income category, resident individuals/any person not being firm or company as the case may be may also submit a self-declaration in specified forms (Form 15G/Form 15H) for non-deduction of TDS.

How can I get a lower TDS deduction?

• For applying lower TDS certificate to the TDS department, the following documents are required to be submitted:

1. Covering letter disclosing nature of the company’s business, why the company should get lower TDS certificate, and details of the party with their correct address & TAN.
2. New Form 13.

How Can I Configure Lower Rate TDS for Vendors in Sage 300 Cloud?

To Configure Lower Rate TDS, we need to follow below steps;

We need to configure in the TDS Setup screen, i.e., Nature of Deductions and Party Details.

We need to create the Nature of deductions which is lower or zero rate deduction along with the reason for the same. And need to define lower rate % in the same screen.

In party details screen we need to define Vendor Name who is applicable for lower rate deduction and select Nature of Deduction from the Finder. We need to define PAN Number and other details.

So, following all these steps, we can use this feature, i.e., Lower Rate TDS deduction for Vendors in Sage 300cloud, as it is straightforward to utilize this functionality in the Sage ERP system.