TDS Cumulative cutoff Deduction

TDS has significant importance in Indian taxation system and every Individual/Company need to pay TDS to government. We are providing a brief explanation on handling of Cumulative Cutoff while operating the Greytrix TDS utility. 

Cumulative cutoff:

 If you check the cumulative cutoff check box then program will consider this section as under cumulative cutoff. You can define cumulative cutoff amount in NOD screen for those TDS section which are belonging from this categories. Refer the below screen shot.

Whenever we define a Nature of deduction with a cumulative cut off section we need to set a particular amount as cumulative cut off limit [refer the below screen shot]. As per the cumulative cut off section rule it says that all the documents which lie below the cumulative cut off amount do not qualify for TDS deduction.

But when any Invoice against the same vendor is created such that the sum of all the previous documents and the current one exceeds the cumulative cut off limit in that case deduction is done on the entire summed up amount.

For example consider VENDOR V0001 is under the NOD which has cumulative cut off section applied against it. Consider, cumulative cutoff amount is RS 30000, in this case if you create 1^st invoice of RS 25000. TDS amount will not be deducted for this invoice. But, if you create a document of RS 6000 then sum of all the documents results in to 31000 and this has exceeded the cut off limit along with the previous document. So, TDS amount would be RS 3100 if TDS percentage is 10.

Note: Suppose you define the cumulative cutoff as RS 30,000 and also you have provided the TDS percentage amount [e.g. 10] for range 0-30,000. In this case program will not consider this NOD as under cumulative cutoff. TDS will be deducted for all documents which are belonging from this NOD.

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