TDS Receivable on Service Income
Service businesses in Nepal routinely receive less cash than they invoiced — because the client withheld tax on the fee and deposited it with the IRD on your behalf, as the Income Tax Act’s withholding provisions (such as §88) require for many service payments. Udyot ERP records that reality in one step, on the Receipt itself, so the invoice still settles in full and the withheld tax lands where it belongs: in TDS Receivable, your advance-tax claim.
The scenario
You invoice a client Rs 28,250 for consultancy. They pay you Rs 24,500 and deposit Rs 3,750 as advance tax on your behalf. You did not get shorted — Rs 3,750 of your money went to the IRD with your PAN on it, claimable against your year-end income tax.
Recording it on the Receipt
- Create the Receipt and pick the customer as usual.
- Tick the TDS section box.
- Choose the section — for example, service fees at 15% — and let the amount compute.
The receipt then splits correctly: what actually reached your bank, and what sits in TDS Receivable. The invoice shows as fully settled — the tax was part of the payment, not a shortfall — so your receivables ageing stays truthful.
Tracking your claim
Reports → TDS Receivable rolls up every withheld amount by section and by party — the working paper for your advance-tax claim at return time. If the report ever shows less than you expect, check its fiscal-year filter first and set it explicitly to your active FY.
Good practice
- Record the TDS on the receipt when the client pays, not retrospectively at year end.
- Collect the client’s deposit evidence periodically and reconcile it against the report.
- Withholding sections and rates change with Finance Acts — confirm the applicable section with your CA rather than assuming last year’s rate.