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Withholding tax payable solution - EY DigiTDS

EY DigiTDS is a comprehensive cloud-based withholding tax payable solution and is equipped to handle Tax Deduction at Source (‘TDS’) on purchase of goods and verify ‘specified person’ status. Similarly, Tax Collection at Source (‘TCS’) module of DigiTDS enables transformation of the entire TCS compliance and reporting cycle and handles customer declarations.

The tax landscape is rapidly changing with “digital” at the helm of this evolution. With the continuously evolving landscape, focus of the Government has moved to using technology as a backbone to ensure tax compliances and to undertake tax risk assessments

TDS and TCS compliances have become increasingly challenging due to:

  • expanding scope (TDS on dividends, purchase of goods etc.) and increased complexity on account of interplay between TDS and TCS provisions.
  • dependency on vendor and customer information (tax return filing status, amount of TDS and TCS credit etc.) to determine applicability of TDS vs TCS and corresponding rate at a transaction level.
  • additional disclosures.
  • technology-based tax assessments.
  • increasing reputational and financial risks.

Further, challenges with respect to TDS data mapping and transformation, limited system-based controls, determination of tax filing status of vendor/customer and related applicable conditions, lack of TDS sensitized data from Enterprise Resource Planning (ERP), and sub-optimal audit readiness increasingly make TDS compliances more cumbersome and challenging for the industry.

Hence, there is a growing business need for a transformation solution for handling TDS and TCS compliances and reporting requirements.  

EY DigiTDS provides a comprehensive solution for transformation of your processes dealing with:

  • TDS on:
    • Dividend payments (by listed companies) made to shareholders.
    • Resident as well as non-resident business payments, including purchase of goods.
  • TCS on sale of specified goods.

DigiTDS enables transformation of TDS and TCS function across people, processes, data and technology in an organization.

withholding tax solution - DigiTDS
  • TDS on dividend payments by listed companies

    Core features of DigiTDS
    • Validation of Indian Tax Identification number (PAN), Lower Deduction Certificate (LDC)
    • “Specified person” validation using tax administration’s compliance check functionality
    • Determination of TDS rate for each category of shareholders*
    • TDS liability calculation on dividend pay-out
    • Preparation of information for related reporting requirements (Form 15CA/CB, Form 15G/H, TDS returns, etc)
    • Dissemination of Form 16A to shareholders
    *We also assist clients with review of information/ declarations to be collated from shareholders and preparation of shareholder master for various categories of shareholders.
  • TDS on all business payments by listed and unlisted companies (other than salaries)

    Core features of DigiTDS
    • “Specified person” validation using tax administration’s compliance check functionality
    • Handling of TDS on purchase of goods
    • Minimal time spent on low value adding activities
    • System-based controls for LDC tracking
    • Easy tracking of TDS on provisions for expenses or advances against expenses, including subsequent adjustments
    • Secondary validation of TDS section and rates
    • Proactive validation of vendor master data such as PAN or LDC
    • Quarterly returns and dissemination of Form 16A
    • Automation driven processing
    • Reduced effort in Clause 34(a) reconciliation and reporting
    *In addition to vendor validations required for TDS compliances, DigiTDS application can also support you with customer validations with respect to applicability of TCS provisions on sales side and corresponding rate.
  • Tax Collection at Source

    Tax Collection at Source module of DigiTDS can assist in automating Tax Collection at Source compliance and reporting life cycle. Please visit Tax Collected at Source (TCS) Life Cycle Solutions for more details.

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