TDS and TCS in Odoo 19: Setup and Everyday Use

Short answer: in Odoo 19, open Accounting ‣ Configuration ‣ Settings and, under Indian Integration, tick TDS (it asks for your company’s TAN) and TCS as needed. That activates the TDS and TCS taxes Odoo ships for each section. Link your expense and income accounts to a TCS/TDS Section so Odoo warns you when a threshold is crossed. Record TDS on a posted vendor bill or payment with the TDS Entry button, add TCS as a tax on customer invoice lines, and keep a PAN on every partner.

This guide builds on how to set up GST in Odoo. For electronic invoices, see GST e-invoicing and e-way bills in Odoo.

What are TDS and TCS?

TDS (Tax Deducted at Source) is income tax that the payer holds back from certain payments, such as contract work, professional fees, rent or commission, and pays to the government against the payee’s PAN. The payee receives the rest and claims credit for the tax deducted.

TCS (Tax Collected at Source) works the other way round. The seller in certain transactions, such as sales of scrap or minerals, collects extra tax from the buyer on top of the invoice and pays it to the government. The buyer then claims credit for it.

Applies to

• Odoo version: Odoo 19. The Odoo 20 India documentation currently reads the same as the Odoo 19 page, but the Odoo 20 code reworks TDS: withholding moves onto a shared withholding-tax module, and the TDS Entry window described here is no longer in the Indian module. Expect different screens on Odoo 20.
• Edition: Community and Enterprise. The TDS and TCS taxes, threshold alerts and TDS entries are in the open-source Indian - Accounting module. The TDS and TCS reports sit in the Tax Report, which is Enterprise.
• Apps: Invoicing or Accounting.

Before you start

1. Your company’s TAN. Odoo makes it compulsory when you switch TDS on.
2. A PAN on every partner. Odoo reads it from the GSTIN automatically. For an unregistered vendor, such as a freelancer, type it in the PAN field on the contact. Partners sharing a PAN are added together for thresholds, across your branches.
3. Know which sections apply to you. Odoo 19’s current code ships two sets of sections: the newer ones it labels I.T. Act 25 (sections 392, 393 and 394), which it activates, and the older ACT 1961 ones (194C, 194J, 206C and so on), which stay archived. A database created on an earlier Odoo 19 build may show a different list. Which section and rate apply is a question for your tax adviser: treat Odoo’s taxes and thresholds as a starting point to check against current law.

Step by step

1. Switch the features on. In Accounting ‣ Configuration ‣ Settings, under Indian Integration, tick TDS and enter your TAN. Tick TCS if you collect it. Save. Odoo activates the taxes in its TDS and TCS tax groups.
2. TDS journal and account. On the same page, under Default Accounts, India TDS Control sets the Journal for TDS entries and the control Account. The Indian chart proposes TDS (Withholding Control).
3. Map accounts to sections. Go to Accounting ‣ Configuration ‣ Chart of Accounts, click View on an account and set TCS/TDS Section. For example, map a professional fees expense account to 393(1) SI.6(iii) D(b) PROF, or a scrap sales income account to 394(1) SI.4 Scrap. Odoo uses this to check thresholds and suggest sections.
4. Review the thresholds. Each section ships with limits: per transaction, aggregate (monthly or per financial year), or both, measured on the untaxed or total amount. To change one, open a TDS or TCS tax in Accounting ‣ Configuration ‣ Taxes, go to the Advanced Options tab and click the internal link next to Section.
5. Set the deduction type for each PAN. Accounting ‣ Accounting ‣ PAN Entity lists every PAN. TDS Deduction can be Normal, Lower, Higher or No. For Lower, attach the certificate in TDS Certificate. No hides the TDS Entry button for that partner. The same form holds MSME/Udyam details.
6. TDS on a vendor bill. Post the bill. Once the section’s threshold is crossed, a banner reads “It’s advisable to deduct TDS u/s … on this transaction.” Click TDS Entry at the top of the bill and check Entry Date, TDS Section, Base Amount (pre-filled from the bill’s lines on accounts mapped to that section), TDS Amount, Journal and Reference. Click Apply TDS. If the partner has no PAN, the window flags Higher Deduction.
7. TDS on an advance payment. Open the vendor payment while it’s still unreconciled and click TDS Entry there. Odoo posts the TDS entry but doesn’t reconcile it with anything.
8. TDS your customers deduct. The same button on a posted customer invoice records TDS that the customer withheld, using the sales-side TDS taxes.
9. TCS on a customer invoice. Add the section’s TCS tax to the invoice line next to the GST tax, for example 1% TCS 394(1) SI.4 SCRAP. TCS isn’t a separate step: it’s an ordinary line tax.
10. Reports (Enterprise). In Accounting ‣ Reporting ‣ Tax Report, pick TDS I.T. Act 25 Report or TCS I.T. Act 25 Report in the report selector, or the ACT 1961 versions, for totals by section. In any edition, a threshold banner’s View Journal Item(s) link lists the lines behind it.

Worked example: a consultant and a scrap sale

The Ludhiana distributor from the GST guide hires a freelance IT consultant who isn’t registered for GST but has given her PAN. Its Professional Fees expense account is mapped to 393(1) SI.6(iii) D(b) PROF, whose preset limit in Odoo’s data is an aggregate of ₹50,000 per financial year. That figure, and the 10% below, are Odoo’s presets; check both against current law.

Bill	Amount	Running total for her PAN	Banner?
July	₹30,000	₹30,000	No
September	₹30,000	₹60,000	Yes, suggests 393(1) SI.6(iii) D(b) PROF

• On the September bill, click TDS Entry and choose 10% TDS 393(1) SI.6(iii) D(b) PROF P as the TDS Section. Odoo fills Base Amount with ₹30,000 and TDS Amount with ₹3,000.
• If your adviser says the July bill must be covered too, raise Base Amount to ₹60,000 (TDS ₹6,000). Odoo warns that the base is larger than the bill but lets you go ahead.
• After Apply TDS, the September bill’s amount due falls from ₹30,000 to ₹27,000 (or ₹24,000), and you pay the consultant the balance.

The same company sells scrap packaging to a dealer and maps Scrap Sales to 394(1) SI.4 Scrap. With the dealer’s PAN on file, the invoice line carries the GST tax plus 1% TCS 394(1) SI.4 SCRAP, and the TCS appears as its own line in the totals. Without a PAN, a banner says to apply TCS at the higher rate, and Apply Higher TCS swaps in 2% TCS 394(1) SI.4 SCRAP, the highest rate Odoo ships in that section.

What you should see

• On the bill: a TDS smart button with the total withheld, a TDS Information tab and a lower amount due.
• In the TDS journal: a posted entry with the reference “TDS of” and the bill number, reconciled with the bill.
• On the invoice: the TCS line in the totals and the PDF.
• In Enterprise: TDS and TCS totals by section in the Tax Report.

Troubleshooting

There’s no TDS Entry button. The bill or invoice must be posted, TDS must be on, and the partner’s PAN must not be set to No deduction. On a payment, the button only shows while the payment is unreconciled.

“Please configure the withholding account from the settings”. Set the Account under India TDS Control.

No threshold banner. The account has no TCS/TDS Section, the feature is off, the bill already has a TDS entry for that section, or the total is still under the section’s limit.

The section you need isn’t in the list. It may be an archived ACT 1961 tax. Unarchive it in Accounting ‣ Configuration ‣ Taxes if your adviser confirms it applies.

There’s no Section field on the tax’s Advanced Options tab. In Odoo 19’s code it only shows when both TDS and TCS are ticked in settings.

“The base amount of TDS is greater than the amount of the Vendor Bill”. A warning, not an error. Check the figure and continue if it’s intended.

Related setup

• How to set up GST in Odoo 19
• GST e-invoicing and e-way bills in Odoo 19
• How to set up your chart of accounts in Odoo
• Vendor bills and payments in Odoo Accounting
• Want TDS and TCS mapped correctly before your next quarter closes? See Odoo consulting.

Official references

• Odoo 19 documentation: India (fiscal localisation)
• Odoo 19 documentation: Taxes
• Odoo 19 documentation: Chart of accounts
• Government of India: Income Tax e-filing portal, for current rates and rules

How this guide was checked: menu paths, field names and the TDS/TCS behaviour were checked against the Odoo 19 documentation and the Indian localisation code in Odoo 19 (settings, sections, taxes, the TDS Entry window and the threshold alerts) in October 2026. The worked example is illustrative and wasn’t run on a live database, so there are no screenshots; labels can vary slightly with your installed apps and language.