You cannot compute withholding taxes correctly and tax collection at source (TCS) group field is empty in intercompany and interconnected transaction in India version of Microsoft Dynamics AX 2012 R2

The tax deduction at source (TDS) on rent under Income-tax Act is required to be deducted on the rent 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/TCS, while under specific tax deduction type user can 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/TCS). Two new lookup menu Exclude tax for TDS or TCS calculation and Include charges for TDS or TCS calculation is provided under withholding tax group (Navigation path: Main menu > General ledger > Setup > Withholding tax > withholding tax group) to exclude indirect taxes and charges for withholding tax calculation.

Two new fields Exclude tax for TDS or TCS calculation and Exclude charges for TDS or TCS calculation are added in the General tab of withholding tax group would be visible only when you unmark and mark again the parameter for TDS or TCS in General Ledger parameters form.

After you apply this fix, the tax collection at source (TCS) group field will be updated in intercompany transaction automatically. However, in case of inter-connected transaction, for example, purchase order from sales order, the TCS group filed will be blank. You have to select TCS group manually.

Hotfix information

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:

Partners

https://mbs.microsoft.com/partnersource/support/

Customers

https://mbs.microsoft.com/customersource/support/information/SupportInformation/global_support_contacts_eng.htm

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