Tax deduction at source (TDS) is a mechanism to collect tax from the source of income. The customer (deductor), who is liable to make a payment for services or goods needs to deduct tax at the source and remit the same to the Central Government.

By enabling the deductibles plugin for your invoices and/or estimates, the amount your customer will pay will have the TDS amount deducted. 

Add TDS to invoice format

To create a new invoice format and enable the deductible plugin, read...

To enable TDS deduction in an existing invoice format navigate to Settings -> Invoice Formats

Select the invoice format you want to enable the deductibles plugin for and click on the Actions ⋮ button next to the chosen invoice format.


Choose the Edit option from Actions ⋮ button. Scroll down to the Plugins section of the invoice format and click on Choose Plugins to enable the plugin.

Against the Deductibles plugin, click the toggle to switch it On and close the plugins window.

You can customize the deductible plugin now enabled for the invoice format. Click on the Add new row button to add a deductible. Add a label for your deduction in the Deduct label column and assign the rate of deduction in the Deduct in % column.

The deductible amount will be auto-calculated on the invoice amount in accordance to the rate assigned. 

Click Save in the Final summary section to save the changes to the invoice format, now enabled with the deductible plugin.

Send an invoice with TDS deduction option

To send an invoice with the deductible plugin, navigate to Collect Payments -> Create Invoice

Select the invoice format you want to create an invoice with and add the details of the invoice. Select Customer and add the items of sale, applicable taxes for the invoice. 

Scroll to the Plugins section of the invoice where the deductibles plugin will be enabled. You can customize the amount the deductible will be Applicable on. The Absolute cost is the amount to be deducted from the invoice amount. It will be automatically calculated in accordance to the rate of deduction in the Deduct in % column.


You can add more than one deductible by clicking on the Add new row button. 

The amount the new deductible will be Applicable on will be automatically calculated on the items and amount included in the invoice. For example, if you have calculated TDS for ₹ 5000 in a ₹11000 invoice, the other deductible you add will be calculated on ₹6000 (₹11000-₹5000). 

You can customize the Deductible label, rate of deduction (Deduct in %), and the Applicable on amount as per your requirements. The Absolute cost or the amount to be deducted will auto-calculated accordingly. 

To preview your invoices click on the Preview invoice button in the Final summary section. 

Click Save & Send to send the invoice to your customer with the deductions.

Your customer will get an option to apply the TDS deduction you have set up while making a payment.

Here's a step-by-step guide to add TDS deductions to your invoices.


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