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Automatic Tax Payments

TDS deduction is mandated by the government. When you upload an invoice to RazorpayX Vendor Payment, you have the option to calculate and deduct tax at source. This tax deducted at source (TDS) can be automatically paid using RazorpayX Tax Payment. You can also choose to manually pay the taxes. Know more about Manual TDS payments.

TDS is calculated for all invoices uploaded to RazorpayX Vendor Payments, irrespective of how you made the payment. This means, TDS is calculated even for invoices that are Mark as Paid.

Advantages🔗

Following are the advantages of using RazorpayX Tax Payments to pay your taxes automatically:

  • The TDS is automatically calculated when you upload an invoice on RazorpayX Vendor Payments.
  • The TDS data is automatically entered on the Tax Payments application.
  • The TDS payments are automatically made before the due date. No need to worry about late fees and penalties.
  • The data entry errors are avoided.
  • The TDS challans are saved and you can access it any time.
  • It saves you time and effort.

Watch Out!
RazorpayX Tax Payments does not file TDS. It only facilitates monthly payments.

Set Up Automatic Tax Payments🔗

To set up the tax payments, we will need a few details, such as your TAN number and business address.

Watch this video to know how to automate tax payments.

To set up tax payments:

  1. Log into your RazorpayX Dashboard.
  2. Navigate to Menu → Tax Payments.
  3. Click Setup Tax Payments and enter the required details such as TAN number and business address and click Continue.
  4. Click Enable Auto-Pay, select the auto-debit account (virtual or current account) and click Enable Auto-Pay.
  5. Enter the OTP you receive on your registered mobile number and click Confirm.

Watch Out!
In Automatic Tax Payments the default tax applicable is Non-Company Deductees. This cannot be changed.

Change Details🔗

You can change your TAN and business address details from the RazorpayX Dashboard.

To change details:

  1. Log into your RazorpayX Dashboard.
  2. Navigate to Menu → My Account & Settings → Business Profile.
  3. Click EDIT DETAILS in the TAX DETAILS section to edit your TAN and business address details.

Disable Automatic Tax Payments🔗

You can disable tax payments at any times if you want.

To disable automatic tax payments:

  1. Log into your RazorpayX Dashboard.
  2. Navigate to Menu → My Account & Settings → Business Profile.
  3. Use the Auto-Debit for TDS on Vendor Payment toggle in the TAX DETAILS section to disable tax payments.

You can also make the tax payments manually. Know more about Manual TDS payments.

How it Works🔗

  1. When you create a vendor on the RazorpayX Dashboard, you set a TDS category for the vendor.
  2. When you upload an invoice and select the vendor, the TDS component is auto-calculated according to the TDS rate selected for the vendor.
  3. When you make a vendor payment, the TDS amount is recorded against the relevant category. The TDS amount is NOT deducted from your account balance at this stage.
  4. TDS payment for the previous month will be paid automatically on the 4th of every month. The TDS amount is deducted from your account balance at this stage.
  5. After the TDS is successfully paid, you can download the challan from the Dashboard.
  6. File the TDS as per your convenience.

Mark As Paid🔗

There is a possibility that you paid TDS using some other method. In such cases, you can mark a TDS payment as paid from the RazorpayX Dashboard.

Handy Tips

  • You can only mark a TDS payment as paid after the 1st of the following month.
  • You need to pay if there is any Late Fees.

TDS Categories🔗

Download the TDS categories and rates available to you.

This list was last updated on 20 August 2021.

Handy Tips
The TDS rates are subject to change as per government guidelines. Refer to the income tax website for the latest TDS updates.

TDS Calculation🔗

TDS is calculated on the invoice subtotal, that is, the invoice amount without GST, Cess and other taxes. Unpaid transactions are not taken into account while calculating TDS.

Watch Out!
RazorpayX Tax Payments follows Cashflow Accounting where the TDS is paid based on the date of payment instead of the invoice. For example, if the invoice dates 8th October 2021 and the payment dates 8th November 2021 then the TDS will be paid on 7th December 2021.

Handy Tips
As per the government norms, the TDS rates are reduced by 25% till the end of FY21.

Let us say TDS for a vendor is set to 7.5%.

CopySubtotal (Amount without GST, Cess and other taxes.) = ₹5,000
TDS = ₹5,000 x 7.5%
TDS = ₹375
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