MICROSOFT DYNAMICS® AX

2012 R2

TAX DEDUCTED AT SOURCE

January 2013
Version 1.0.0
 Contents

Introduction................................................................................................3
Audience.....................................................................................................3
Scenario......................................................................................................3
Before you begin........................................................................................4
TDS setup...................................................................................................4
Procure to Pay..........................................................................................19
Vendor Advance payment........................................................................22
TDS settlement process............................................................................23
Authority payment....................................................................................25
TDS statement..........................................................................................27
TDS Inquiry..............................................................................................29
Conclusion................................................................................................31
Disclaimer................................................................................................32

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 2

INTRODUCTION
This document demonstrates how Microsoft Dynamics Ax2012 R2 supports TDS functionality.
The primary objective of the demo script is to provide the user with an overview on the TDS setup and posting of
transaction with financial impact.

AUDIENCE
The scripts in this document should be used to demonstrate the value of Microsoft Dynamics AX 2012
R2 and how the solution support transactions with TDS execution to a
business decision maker (BDM). The executives that you present to will find value in this script if
they have and interested in:
 Creation of Purchase order
 Creation of Advance payment
 View financial entries with TDS
 Authority settlement process
 TDS statement

SCENARIO
This script focuses on the following processes:
 TDS setup in AX2012
 Procure to pay
 Vendor Advance payment
 Authority settlement process
 TDS statement process

DEMO PRESET CONFIGURATION:

This script was written to work with the Microsoft Dynamics AX 2012 R2 RTM Virtual Machine (VM), released in
December 2012. Make sure that the VM is up and running and that you have logged on. The script addresses key
pain points and challenges that different roles might face. However the demo can be completed as the system
administrator.
 Domain: CONTOSO
 User: Administrator
 Password: pass@word1

BEFORE YOU BEGIN

Before you begin please add the following to your environment in demo data set and company Contoso INMF:
Use the following log in details:
 Domain: CONTOSO

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 3

  User: Administrator
 Password:pass@word1

TDS SETUP
Use this procedure to create TDS setup.

General ledger parameters

Accounting supervisor

1. Navigate to General ledger > Setup > General

ledger parameters

2. Click tab Direct taxes

3. Mark Activate TDS checkbox
4. Mark Invoice checkbox
5. Mark Payment checkbox
6. Click button Close

Create Chart of accounts

1. Navigate to General ledger > Common forms >

Main accounts

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 4

2. Click New Main account

3. Set field Main account = 202078

4. Set field Name = TDS- Contract company
5. Click fast tab General
6. Set field Main account type = Liabilities
7. Click fast tab Setup
8. Set field Posting type = Withholding tax (TDS)
9. Click New
10. Set field Main account = 202080
11. Set field Name = TDS- Contract surcharge company
12. Click fast tab General
13. Set field Main account type = Liabilities
14. Click fast tab Setup
15. Set field Posting type = Withholding tax (TDS)
16. Click New
17. Set field Main account = 202084
18. Set field Name = TDS- Contract SHE CESS
Company
19. Click fast tab General
20. Set field Main account type = Liabilities
21. Click fast tab Setup
22. Set field Posting type = Withholding tax (TDS)
23. Click New
24. Set field Main account = 202082
25. Set field Name = TDS- Contract E-CESS Company
26. Click fast tab General
27. Set field Main account type = Liabilities
28. Click fast tab Setup
29. Set field Posting type = Withholding tax (TDS)
30. Click New
31. Set field Main account = 132220
32. Set field Name = TDS- Contract company
33. Click fast tab General
34. Set field Main account type = Asset
35. Click fast tab Setup
36. Set field Posting type = Withholding tax (TDS)
37. Click New
38. Set field Main account = 132240
39. Set field Name = TDS- Contract surcharge

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 5

40. Click fast tab General
41. Set field Main account type = Asset
42. Click fast tab Setup
43. Set field Posting type = Withholding tax (TDS)
44. Click New
45. Set field Main account = 132260
46. Set field Name = TDS- Contract SHE CESS
47. Click fast tab General
48. Set field Main account type = Asset
49. Click fast tab Setup
50. Set field Posting type = Withholding tax (TDS)
51. Click New
52. Set field Main account = 132250
53. Set field Name = TDS- Contract E-CESS
54. Click fast tab General
55. Set field Main account type = Asset
56. Click fast tab Setup
57. Set field Posting type = Withholding tax (TDS)
58. Click button Close

Create Registration number

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 6

1. Navigate to Organization administration > Setup
> India > Enterprise tax registration numbers

2. Select field Select tax = Direct tax

3. Select field Registration number type = Company
4. Click New
5. Set field Registration number = AXDF87645F
6. Set field Description = TAN Number
7. Click fast tab General
8. Set field Circle number = 47
9. Set field Ward number = (1)
10. Set field Assessing officer = 1
11. Save the record
12. Click button Close

Define Registration number to the Legal entity

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 7

1. Navigate to Organization administration > Setup
> Organization > Legal entities

2. Click Taxes

3. Click fast tab Tax information

4. Click Add

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 8

5. Set field Name or description = Taxinfor_001
6. Mark Primary checkbox
7. Click fast tab Withholding tax
8. Set field Registration number = AXDF87645F
9. Close forms

Withholding tax component groups

1. Navigate to General ledger > Setup > Withholding

tax > Withholding tax component groups

2. Set field Tax type = TDS

3. Create new record
4. Set field Withholding tax component groups =
Contract
5. Set field Description = Contract and Sub-contract
6. Click fast tab General
7. Set field Status = Resident
8. Set field Section code = 94C
9. Close form

Withholding tax components

1. Navigate to General ledger > Setup > Withholding

tax > Withholding tax components

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 9

2. Set field Tax type = TDS
3. Click New
4. Set field Withholding tax component = Contract
5. Set field Withholding tax component groups =
Contract
6. Click fast tab General
7. Set field Description = Contract
8. Click button Threshold
9. Click New
10. Set field From date = 04/01/2010
11. Set field To date = 03/31/2013
12. Click fast tab General
13. Set field Threshold = 75000.00
14. Set field Exception threshold = 30000.00
15. Click button Close
16. Click New
17. Set field Withholding tax component = Contract
_E_Ces
18. Set field Withholding tax component groups =
Contract
19. Click New
20. Set field Withholding tax component =
Contract_SHE_Ce
21. Set field Withholding tax component groups =
Contract
22. Set field Description = Contract _SHE_Cess
23. Click New
24. Set field Withholding tax component =
Contract_Surcha
25. Set field Withholding tax component groups =
Contract
26. Set field Description = Contract Surcharge
27. Close form
Create Vendor authority
Accounts payable manager

1. Navigate to Accounts payable > Common >

Vendors > All vendors

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 10

2. Click New Vendor
3. Set field Name = TDS Authority (kar)
4. Set field Group = 50

5. Click fast tab Addresses

6. Click Add
7. Set field Name or description = Invoice
8. Set field Country/region = IND
9. Set field ZIP/postal code = 560051
10. Click button OK
11. Click button Close

Create Withholding tax authority

Accounting supervisor

1. Navigate to General ledger > Setup > Withholding

tax > Withholding tax authorities

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 11

2. Set field Tax type = TDS
3. Click New
4. Set field Withholding tax authority = TDS Authority
5. Set field Description = TDS Authority (KAR)
6. Click fast tab General
7. Set field Vendor account = INMF-000011
8. Click button Close

Withholding tax settlement period

1. Navigate to General ledger > Setup > Withholding

tax > Withholding tax settlement period

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 12

2. Click New
3. Set field Settlement period = TDS
4. Set field Description = TDS_KA
5. Set field Withholding tax authority = TDS Authority
6. Set field Period interval = Months
7. Set field Number of units = 1
8. Click fast tab Periods
9. Click Add
10. Set field From date = 4/1/2010
11. Set field To date = 4/30/2010
12. Click button New period, to create period as required
13. Click button Close
Withholding tax codes

1. Navigate to General ledger > Setup > Withholding

tax > Withholding tax code

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 13

2. Click New
3. Set field Withholding tax code = Contract
4. Set field Name = Contract
5. Click fast tab General
6. Set field Tax type = TDS
7. Set field Withholding tax component = Contract
8. Set field Main account = 202078
9. Set field Settlement period = TDS
10. Set field Receivable account = 132220
11. Click button Values
12. Click New
13. Set field Value = 2.00
14. Set field PAN non availability % = 5.00
15. Close forms
16. Click New
17. Set field Withholding tax code = Cont_Sur
18. Set field Name = Contract_Surcharge
19. Click fast tab General
20. Set field Tax type = TDS
21. Set field Withholding tax component =
Contract_Surcha
22. Set field Main account = 202080
23. Set field Settlement period = TDS
24. Set field Receivable account = 132240
25. Click button Values
26. Click New
27. Set field Value = 10.00
28. Set field PAN non availability % = 5.00
29. Click button Close
30. Click New
31. Set field Withholding tax code = Cont_Ecess
32. Set field Name = Contract E-Cess
33. Click fast tab General
34. Set field Tax type = TDS
35. Set field Withholding tax component = Contract
_E_Ces
36. Set field Main account = 202082
37. Set field Settlement period = TDS
38. Set field Receivable account = 132250
39. Click button Values
40. Click New
41. Set field Value = 2.00
42. Click button Close
43. Click New
44. Set field Withholding tax code = Cont_Scess

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 14

45. Set field Name = Contract SHE-Cess
46. Click fast tab General
47. Set field Tax type = TDS
48. Set field Withholding tax component =
Contract_SHE_Ce
49. Set field Main account = 202084
50. Set field Settlement period = TDS
51. Set field Receivable account = 132260
52. Click button Values
53. Click New
54. Set field Value = 1.00
55. Close forms

Withholding tax groups

1. Navigate to General ledger > Setup > Withholding

tax > Withholding tax groups

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 15

2. Click New
3. Set field Sales tax group = Contract
4. Set field Description = Contract
5. Set field Tax type = TDS
6. Click fast tab Setup
7. Click Add
8. Set field Withholding tax code = Contract
9. Mark Overlook threshold checkbox
10. Click Add
11. Set field Withholding tax code = Cont_Sur
12. Mark Overlook threshold checkbox
13. Click Add
14. Set field Withholding tax code = Cont_Scess
15. Mark Overlook threshold checkbox
16. Click Add
17. Set field Withholding tax code = Cont_Ecess
18. Mark Overlook threshold checkbox
19. Click button Designer
20. Click New
21. Set field Tax code = Contract
22. Set field Taxable basis = Gross amount
23. Click New
24. Set field Tax code = Cont_Ecess
25. Set field Taxable basis = Excl. Gross amount
26. Set field Calculation expression = +[Contract]
27. Click New
28. Set field Tax code = Cont_Scess
29. Set field Taxable basis = Excl. Gross amount
30. Set field Calculation expression = +[Contract]
31. Click New
32. Set field Tax code = Cont_Sur
33. Set field Taxable basis = Excl. Gross amount
34. Set field Calculation expression = +[Contract]+
[Cont_ECess]+[Cont_SCess]
35. Close forms

Withholding tax reporting codes

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 16

1. Navigate to General ledger > Setup > Withholding
tax >India >Withholding tax reporting codes

2. Click New
3. Set field Withholding tax component = Contract
4. Set field Withholding tax component group =
Contract
5. Click fast tab General
6. Set field Reporting code = TDS
7. Click New
8. Set field Withholding tax component = Contract
_E_Ces
9. Set field Withholding tax component group =
Contract
10. Click fast tab General
11. Set field Reporting code = PE-Cess
12. Click New
13. Set field Withholding tax component =
Contract_SHE_Ce
14. Set field Withholding tax component group =
Contract
15. Click fast tab General

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 17

16. Set field Reporting code = SHE Cess
17. Click New
18. Set field Withholding tax component =
Contract_Surcha
19. Set field Withholding tax component group =
Contract
20. Click fast tab General
21. Set field Reporting code = Surcharge
22. Close forms
Vendors form
Accounts payable manager

1. Navigate to Accounts payable>Common

forms>Vendors>All vendors

2. Select Vendor account = INMF-000001

3. Click on Edit
4. Click fast tab Invoice and delivery
5. Mark Calculate withholding tax checkbox
6. Set field TDS group = Contract
7. Click button Close

End of TDS setups

PROCURE TO PAY
Set Session date = 04/13/2012

Purchasing agent

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 18

1. Navigate to Accounts payable > Common >
Purchase orders > All Purchase orders

2. Click button Purchase order

3. Set field Vendor account = INMF-000001

4. Click button Yes
5. Click fast tab General
6. Set field Site = Site 1
7. Set field Warehouse = 11
8. Click button OK

9. Set field Item number = M0003

10. Set field Quantity = 1180.00
11. Set field Unit price = 500
12. Click fast tab ‘Line details’
13. Set field TDS group = Contract
14. Click button Withholding tax

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 19

15. Validate Withholding tax calculation
16. Close form

17. Click button Confirm

Accounts payable clerk

18. On the Action Pane , Click Invoice > Invoice

19. Set field Default quantity for lines = Ordered
quantity
20. Set field Number = INV2012_008
21. Click button Post>Post
22. Click button Invoice journal
23. Click button Voucher
24. Close forms

Set Session date = 04/18/2012

Accounts payable payment clerk

1. Navigate to Accounts payable > Journals >

Payments > Payment journals

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 20

2. Click New
3. Set field Name = VendPay
4. Click button Lines
5. Set field Account = INMF-000001
6. Click menu button 'Functions > Settlement'
7. Mark Invoice number = INV2012_007
8. Click button Close

9. Set field Offset account type = Bank

10. Set field Offset account = INR OPER
11. Click menu button 'Post > Post
12. Close Infolog

13. Click menu button Inquiries > Voucher

14. Close forms

End of Procure to Pay

VENDOR ADVANCE PAYMENT

1. Navigate to Accounts payable > Journals >

Payments > Payment journals

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 21

2. Click New
3. Set field Name = VendPay
4. Click button Lines
5. Set field Account = INMF-000001
6. Set field Debit = 100000.00
7. Set field Offset account type = Bank
8. Set field Offset account = INR OPER

9. Click menu button Withholding tax > Withholding

tax

10. Validate Withholding tax calculation

11. Close form

12. Click menu button 'Post > Post'

13. Close Infolog
14. Click menu button 'Inquiries > Voucher'
15. Close form

End of Vendor advance payment scenario

TDS SETTLEMENT PROCESS

Use this procedure to execute TDS settlement process.

Accounting supervisor/Accountant

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 22

1. Navigate to General ledger > Periodic > India
withholding tax > Withholding tax payment

2. Set field Tax type = TDS

3. Set field Tax Account Number (TAN) =
AXDF87645F
4. Set field Settlement period = TDS
5. Set field From date = 04/01/2012
6. Set field Transaction date = 04/30/2012
7. Mark Update checkbox
8. Click OK

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 23

1. Navigate to General ledger > Setup > Withholding
tax> India > Withholding tax settlement period

2. Set field Tax type = TDS

3. Select Settlement period = TDS
4. Click button Withholding tax payment

5. Click button Voucher

6. Close form

End of tax settlement scenario

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 24

AUTHORITY PAYMENT
Use this procedure to process authority payment

Set session date = 04/30/2012

Accounts payable payment clerk

1. Navigate to Accounts payable > Journals >

Payments > Payment journals

2. Click New
3. Set field Name = VendPay
4. Click button Lines
5. Set field Account = INMF-000011
6. Click menu button 'Functions > Settlement'

7. Mark Transactions
8. Click button Close

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 25

9. Set field Offset account type = Bank
10. Set field Offset account = INR OPER
11. Click menu button 'Post > Post

12. Close Infolog

13. Click menu button Inquiries > Voucher

14. Validate voucher entries

15. Close forms

16. Click menu button Withholding tax > Challan

information
17. Set field Challan number = 15645
18. Set field Date = 04/30/2012
19. Set field Bank name = INR OPER
20. Set field BSR code = 0006548
21. Close forms

End of Authority payment scenario

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 26

TDS STATEMENT
Accountant/Accounting supervisor

1. Navigate to General ledger > Reports >India

>TDS >TDS statement

2. Set field Tax Account Number (TAN) =

AXDF87645F
3. Set field Statement = Form 26Q
4. Set field Date = 04/30/2012
5. Set field Responsible person = 000001
6. Set field Designation = Manager
7. Set field Printing date = 07/01/2012
8. Mark Generate e-file checkbox
9. Set field File name = D:\TDS\26Q3.txt
10. Mark Filed checkbox
11. Click button OK
12. Close form

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 27

1. Navigate to General ledger > Periodic > India
withholding tax > TDS token numbers

2. Set field Token number = 14587

3. Set field Receipt number = 14587775
4. Click button Close

End of TDS statement process

TDS INQUIRY
Accounting supervisor/Accountant

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 28

1. Navigate to General ledger > Inquiries > India
posted tax > Withholding tax > TDS

2. Set field Tax Account Number (TAN) =

AXDF87645F
3. Set field Settlement period = TDS
4. Set field Withholding tax component group =
Contract
5. Set field From date = 4/1/2012
6. Set field To date = 4/30/2012

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 29

7. Click Ok
8. Validate transaction
9. Close form

End of TDS inquiry script

End of demo script
CONCLUSION
This demonstration has guided you through the creation and posting of TDS transaction in AX.
 Creation of Purchase order
 Creation of Advance payment
 Validation of financial entries with TDS
 Authority settlement process
 TDS statement process
 TDS inquiry

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 30

DISCLAIMER
© 2011 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista, Microsoft Dynamics and other product names are or
may be registered trademarks and/or trademarks in the U.S. and/or other countries. Other names and brands may be claimed as the property of
others.
The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this
presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of
Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. Microsoft may make
changes to specifications and product descriptions at any time, without notice.
Sample code included in this presentation is made available AS IS. THE ENTIRE RISK OF THE USE OR THE RESULTS FROM THE USE
OF THIS CODE REMAINS WITH THE USER.

MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS

PRESENTATION. NO LICENSE, EXPRESS OR IMPLIED, BY ESTOPPEL OR OTHERWISE, TO ANY INTELLECTUAL PROPERTY
RIGHTS IS GRANTED BY THIS PRESENTATION. Microsoft products are not intended for use in medical, life saving, or life sustaining
applications.

Microsoft Dynamics is a line of integrated, adaptable business management solutions that enables you and your people to make business
decisions with greater confidence. Microsoft Dynamics works like and with familiar Microsoft software, automating and streamlining financial,
customer relationship and supply chain processes in a way that helps you drive business success.

U.S. and Canada Toll Free 1-888-477-7989

Worldwide +1-701-281-6500
www.microsoft.com/dynamics

AX2012R2- Microsoft Dynamics AX 2012 R2 Tax Deducted at Source Demo Script 31