How to setup Tax amount withheld for TDS?

Problem Statement

This article explains how to enable and use the Tax Amount Withheld (TAW) / TDS feature in Chargebee for recording tax withheld by customers on invoices (offline payments).

Related Scenarios

• How to configure Tax Amount Withheld?
• How to record TAW (Tax amount withheld) for TDS?
• Can tax withheld be recorded for online payments?
• What happens when tax withheld is removed from an invoice?

Solution

To record tax amount withheld for TDS in Chargebee, you must enable the setting for your site (via Support), then you can record withheld amounts on payment-due or not-paid invoices. Tax withheld is supported only for offline payments. When the setting is disabled, you cannot add tax withheld to any invoice (existing or new); you can remove an existing tax-withheld line but cannot add it back.

Steps to Set It Up

Enable the setting

1. Go to Settings > Configure Chargebee > Taxes.
2. Enable Record Tax Amount Withheld by Customers for offline payments.
3. Click Save.

Record tax amount withheld on an invoice

1. Open Customers or Subscriptions and select the customer or subscription.
2. Open the associated Payment Due or Not Paid invoice.
3. Click the ellipsis icon and enter the withheld amount (equal to or less than the amount due).
   
4. Optionally edit the note that appears for the withheld amount on the invoice PDF.
   
5. Click Proceed. The invoice PDF will show the tax withheld note.
   
6. You cannot edit the tax amount withheld after recording; you can remove it and add it again if needed.
   

Additional Information

Issuing Credit Notes on Invoices with Taxes Withheld: When creating refundable credit notes or refunds for an invoice with tax withheld, the credit amount cannot exceed the sum of invoice amount, taxes withheld, and credits from previous credit notes.