This article applies to Microsoft Dynamics AX for the Indian (in) region.
When you compute withholding tax (either tax deduction at source (TDS) or tax collection at source (TCS)) for a transaction in the Indian version of Microsoft Dynamics AX 2009 Service Pack 1, indirect taxes and charges are include in the gross transaction value automatically. As per CBDT circular 1/2014, withholding tax on a transaction is required to be computed excluding service tax than incorrect withholding tax amount is computed and displayed by the system.
There is no setup to exclude taxes and charges in the existing functionality.
The TDS on any transaction under "Income-tax Act" is required to be deducted on the amount paid or payable excluding the service tax. While as per existing localization, indirect tax amount and charges are automatically included in the gross transaction value for computation of TDS or TCS. Under specific tax deduction type, user has to exclude taxes and charges for computation of TDS or TCS.
This hotfix will enable you to exclude or include any tax or charges for withholding tax calculation (TDS or TCS). Under withholding tax group form, new field group "Taxes and charges" is created. Under this field group, check box "Exclude tax for TDS or TCS calculation" and look up "Include charges for TDS or TCS calculation" is provided (Navigation path: Main menu > General ledger > Setup > Withholding tax >withholding tax group). On marking check box, exclude tax for TDS or TCS calculation a new button "Taxes" will enable and on click, it will open new form to select different tax type for exclusion of TDS or TCS calculation.
A supported hotfix is available from Microsoft. There is a "Hotfix Download Available" section at the top of this Knowledge Base article. If you are encountering an issue downloading, installing this hotfix, or have other technical support questions, contact your partner or, if enrolled in a support plan directly with Microsoft, you can contact technical support for Microsoft Dynamics and create a new support request. To do this, visit the following Microsoft website:
https://mbs.microsoft.com/support/newstart.aspx You can also contact technical support for Microsoft Dynamics by phone using these links for country specific phone numbers. To do this, visit one of the following Microsoft websites:
https://mbs.microsoft.com/customersource/support/information/SupportInformation/global_support_contacts_eng.htmIn special cases, charges that are ordinarily incurred for support calls may be canceled if a Technical Support Professional for Microsoft Dynamics and related products determines that a specific update will resolve your problem. The usual support costs will apply to any additional support questions and issues that do not qualify for the specific update in question.
If you have customizations for one or more of the methods or the tables that are affected by this hotfix, you must apply these changes in a test environment before you apply the hotfix in a production environment.
For more information about how to install this hotfix, click the following article number to view the article in the Microsoft Knowledge Base:
893082 How to install a Microsoft Dynamics AX hotfix
You must have the Indian version of Microsoft Dynamics AX 2009 SP1 installed to apply this hotfix.
You must restart the Application Object Server (AOS) service after you apply the hotfix.
The global version of this hotfix has the file attributes (or later file attributes) that are listed in the following table. The dates and times for these files are listed in Coordinated Universal Time (UTC). When you view the file information, it is converted to local time. To find the difference between UTC and local time, use the Time Zone tab in the Date and Time item in Control Panel.