What is the tax amount withheld?
Who can record the tax amount withheld?
I am unable to see this feature on the Chargebee site.
What is TDS?
Tax Amount Withheld or Tax Deducted as Source (TDS) is a direct taxation mechanism that was introduced to collect any applicable tax at the source of payment transactions, by the buyer. As per the TDS mechanism, when a buyer(deductor) is liable to make a payment to the seller(deductee), the buyer deducts tax at the source and transfers the balance to the deductee. The buyer withholds a certain part of the total amount to be paid to the seller and pays it directly to the government as taxes.
Let’s look at an example. Acme Inc makes a payment of USD 20,000 towards professional fees to ABC Corp. and the applicable tax rate is 10%. As per TDS, Acme withholds the tax of USD 2,000 and makes a net payment of USD 18,000 to ABC Corp. Acme Inc. directly deposits the amount of USD 2,000 to the credit of the government.
Based on your business requirements and tax compliance rules in your country, you can record TDS in Chargebee by specifying the amount withheld, for offline payments.
Note: The feature to record tax amount withheld needs to be enabled in your Chargebee site by users with Owner, Admin, or Finance Executive roles. After the feature is enabled, users with Owner, Admin, Customer Support, and Sales Manager roles can record tax amount withheld for payment due/not paid invoices.