Tax Deducted at Source (TDS) Frequently Asked Questions
Sl.No. Question
1 In R12 can TDS functionality work at Legal
entity (LE) level?
2 What is the relevance of rounding factor
given at TDS Year Info Form?
3 Can exception threshold be defined without
normal threshold setup?
4 Can Threshold be defined from back date?
5 What should be the value to be provided in
field Vendor Additional Information form if
the Supplier does not have PAN number?
6. Thresholds are not appearing post
performing supplier/vendor additional
information setup?
7. On what line types TDS is deducted?
8. Can TDS be deducted on negative Line?
9. Getting error INVALID PAN Deduction At
Higher Rate Is Not Selected while validating
invoice. How to resolve?
Answer
For R12 TDS is at operating unit level only.
For TDS invoices the rounding will happen based
on the rounding factor set at the TDS Year Info
form. Even if it is not set system will by default
round all invoices to nearest Rupee.
Note the rounding factor given at Tax code
definition form level is irrelevant for the TDS
type of Tax.
Exception setup is defined for the purpose of
deducting TDS other than normal rate. System
will allow defining exception setup only if normal
threshold setup is in place.
Threshold need to be defined based on the
current date. Current functionality do not allow
defining threshold in back date.
As per the income tax rules the value to be
provided is PANNOTAVBL. This is only value to
be provided for suppliers not having valid PAN so
that Application can deduct TDS at higher rate.
Please perform the following steps to resolve the
issue:-
1. Query the Regime Registration setup for the
problematic Operating Unit.
2. Delete the value of the TAN# attached. (Copy
pastes this value in some notepad file).
3. Save the record.
4. Clear the Form.
5. Re-query the Operating Unit again in the same
Regime form.
6. Navigate to the Regime Registration form.
7. Re-enter the value for TAN# Attribute. (copy
paste the stored value). Save the record.
8. Then, check the Additional Supplier
information afresh.
The current functionality deducts TDS on Item,
Miscellaneous and PPV Lines.
No TDS cannot be deducted on negative line.
The errors comes up if PAN Number is defined as
"PANNOTAVBL" but the tax rate attached is not
20%.
So please create a tax code of 20% and attach

10 While validating invoice application is
showing either of following errors:-
Threshold is not defined for the applicable
TDS section OR
Fin Year must be specified as threshold
group identifier
What is the cause?
11 How to Enter Tax id in Invoice Distribution
for TDS deduction in R12?
12 What conditions will make Prepayment
application/unapplication successful?
13 Will RTN invoice generate if user applies
prepayment to never validated invoice?
14 Why application is showing error Cannot
unapply the prepayment as it was applied
before validating the standard invoice?
the same to the invoice and validate it...
The cause of the errors can be either of the
following:-
1. TDS Fin year not defined or
2. Threshold are not setup or
3. GL Date of the invoice was picked pre
date before Start date of threshold. E.g.
Invoice GL Date is 18-MAR-2013 but
threshold are starting from 20-MAR-
2013. or
4. If the vendor is attached to an exception
setup and if the normal threshold is end
dated and there is no active normal
threshold then also the error may come.
So make sure that normal threshold is
also active when vendors are attached to
exception setup.
In R12 Invoice distribution DFF is replaced by
GDF. TDS tax ID should be given in the GDF. For
more details please refer metalink note
464904.1.
For successful prepayment
application/unapplication the following pre
requisite should satisfy:-
1. Both Prepayment and standard invoice should
have TDS rate applied.
2. Rate applied should belong to same section
code.
RTN invoices are the reversal invoice created to
knock of the effect of duplicate TDS generated at
prepayment level. Since in case of never
validated invoices since no TDS invoices
generated there is no duplicate TDS deduction
and hence no RTN invoices will be generated by
system.
System will calculate TDS on differential amount
and create TDS invoices provided prepayment
amount is less than invoice amount.
The error is intended provided user tries to
unapply prepayment applied on a never
validated invoice. The intention of the error is to
stop user to unapply prepayment as to avoid
compliance issue. Consider the following
example:-
1. Prepayment created for Rs 1000 with
TDS

15 What is the recommended approach of
prepayment application out of the
following:-
1. After validation
2. Before Validation?
16 In the current functionality do system
generates TDS invoice every time when an
invoice line/distribution is added or
modified?
17 RTN Invoice not generated when few Invoice
lines does not have TDS?
18 In R12 unable to find India Payment
Information DFF at payment workbench?
19 What are the setups to be performed for
generation of ETDS returns?
2. Created standard invoice of Rs 2000 with
TDS
3. Applied prepayment before validation of
standard invoice. System will calculate
TDS on differential amount i.e 1000
(2000-1000) and will generate invoice
4. If application allows this prepayment to
get unapplied then there will be short
TDS deduction on Rs 1000 of standard
invoice. Current functionality allows TDS
generation only of first validation.
The recommended approach is to apply
prepayment on validated invoice. This will help
in prepayment unapplication if required in
future. Currently functionality stops prepayment
unapplication on never validated invoice. For
more details please review Question#14.
As per the intended product behavior TDS will be
deducted only on first validation. If post
validation user wants to add or modify Invoice
lines/distribution then the only way is to cancel
the invoice and create fresh one.
Consider the following example:-
Invoice Amount Rs 20000
Line 1 Rs 10000 without TDS
Line 2 Rs 10000 with TDS
Prepayment of Rs 13000 on which TDS is
deducted getting applied on the above invoice.
Here the core AP applies prepayment on FIFO
basis and hence the out of Rs 13000
prepayment, 10000 will be applied to first line
where no TDS is applied and hence no RTN will
be generated. Balance 3000 will be applied to
second line which contains TDS and hence TDS
will be generated.
Recommended approach in this scenario is to
have 2 different site one for TDS and another for
no TDS to avoid this issue.
In R12 DFF is replaced with forms. For India
Payment Information DFF new form called
India TDS Challan is introduced to capture the
payment information with respect to TDS.
For generating ETDS returns certain information
is required to be captured. Oracle Application is
capturing the information in regime registration
form.

20 Section Codes Covered In Concurrents 'India
- Program to Generate eTDS Quarterly
Certificates 26 Q & 27 Q'
21 What are the steps to be followed for
generating ETDS (26Q/27Q) Returns?
22 Is it require to generate TDS certificates from
Oracle Application?
23 TDS is not getting deducted on Service Tax
Miscellaneous Lines..Why?
Please refer metalink note 888067.1 - Changes in
TDS & TCS relating to electronic filing in India
Income Tax from 1st October 2009 to know the
setup to be performed at regime registration
level.
India - Program to Generate eTDS Quarterly
Certificate 27Q will takes care below section
codes.
SEC. 194(E),SEC. 195,SEC. 196(A),SEC.
196(B),SEC. 196(C),SEC. 196(D)
All other sections will be taken care by India -
Program to Generate eTDS Quarterly Certificates
26Q
Following are the pre requisites for generating
ETDS return:-
1. Creation of invoice with TDS. TDS invoice
should be successfully generated
2. Pay invoices to tax authority
3. Update payment information in form
India TDS Challan
4. Run concurrent India Process TDS
Payment
5. Run the respective ETDS concurrent i.e
26Q or 27Q.
As per the CBDT circular No-01/2012 with effect
from 01-APR-2011 TDS certificates need to be
generated through TIN Central system and which
downloaded from TIN website.
For more details please refer NSDL & TDS
websites:-
https://nsdl.co.in/
www.tdscpc.gov.in/
Hence now it is not required to generate TDS
certificate through Oracle Applications.
Please make sure the TDS Section Code (Example
SEC 194(I)) associated with the TDS Tax ID
attached to invoice is being mentioned in the
lookup JAI_TDS_SECTION_SERVICE
India Local Payables --> Asia/Pacific Lookups..
Query for Type as "JAI_TDS_SECTION_SERVICE"

24 What can be the reason for TDS Deductions
not appearing in 'India - TDS
Prescribed Rates Report' and 'India - TDS
Lower Rates Report'?
25 Is there a report where one can see all TDS
related Invoices and Credit Memos
Created for an Invoice?
If the section code is not mentioned in the
lookup then TDS will not be deducted on service
tax lines.
It is a pre-requisite to run the 'Generate TDS
Certificates' to view the data in 'India - TDS
Prescribed Rates Report' and 'India - TDS Lower
Rates Report'.
You can run 'India - TDS Related Invoices' Report
to view details of all TDS related
Invoices created for an Invoice. This report has to
be run for a specific period.