API ReferenceIntegrationsKnowledge Base

Tax Payments

When you upload an invoice on the RazorpayX Dashboard, you have the option to calculate and deduct tax at source. This tax deducted at source (TDS) can be paid using the Tax Payment App.

TDS deduction is mandated by the government.

Set up Tax Payments#

In order to use the tax payments module, we will need a few details such as your TAN number and business address. To set up tax payments:

  1. Log into your Dashboard.
  2. Navigate to MenuTax Payments.
  3. Fill out the Activate Tax Payments form. This form requires some basic details such as TAN number and business address. tax payments activation form

Auto-TDS is now set up. When you make a vendor payment, the TDS amount is auto-deducted and recorded against the relevant category.

Note:
TDS is calculated for all invoices uploaded on the Dashboard, irrespective of how you paid the invoice.

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. Once the TDS is successfully paid, the challan is available for download on the Dashboard.
  6. You can download the challan and 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.

Note:

  • You can only mark a TDS payment as paid after the 1st of the following month.
  • Late fees, if any, will have to be paid by you.

TDS Categories#

Listed below are the various TDS categories and rates available to you.

Category

Original Rate

Lowered Rate

194A Interest

10%

7.5%

194C Contractor - HUF/Individuals

1%

0.75%

194C Contractor - Others

2%

1.5%

194H Commission or brokerage

5%

3.75%

194I Rent on Plant and Machinery

2%

1.5%

194I Rent on Land or building or furniture or fitting

10%

7.5%

194J Fee for professional services

10%

7.5%

No TDS

0%

0%

Calculating TDS#

TDS is calculated on the Invoice Subtotal, that is, the invoice amount without GST, cess and other taxes.

Note:
As per government norms, TDS rates have been 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

FAQs#

You can find a list a frequently asked question (FAQS) about Tax Payments on our Knowledgebase.

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