AP use case · TDS compliance

TDS is deducted in seconds.
Reconciled over months.

Every vendor payment triggers a section, a rate, a due date and a certificate - and every customer deduction on your revenue must land in your 26AS. Finnoto computes TDS at invoice level, reconciles both directions quarterly, and runs the vendor & customer communication itself.

Quarterly TDS recon

Books ↔ 26AS ↔ Form 16A,
closed every quarter.

TDS recon · Q2 FY 2026-27 26AS synced
₹22.4L
TDS deducted on vendor payments (194C/J/Q/I)
₹18.7L
TDS credit receivable per books (customer deductions)
₹1.2L
Credit missing in 26AS - 4 customers chased
PartySectionBooks vs 26ASStatus
Acme Supplies (vendor)194C · 2%₹2,490 = ₹2,490Deposited · Form 16A emailed
Neon Marketing (vendor)194J · 10%₹84,000 = ₹84,000Deposited · Form 16A emailed
BigBasket Hub (customer)194Q · 0.1%₹38,400 ≠ ₹0! Not in 26AS · customer notified
Rapido Fleet (customer)194C · 2%₹61,200 ≠ ₹54,000✕ Short credit · ticket #TDS-88
Auto follow-up → BigBasket Hubsent with annexure
"TDS of ₹38,400 deducted on our invoices (list attached) is not reflecting in our Form 26AS for Q2. Request you to verify the deposit & TDS return (26Q) and share the correction status."
Form 16A distribution
212 certificates generated from TRACES & emailed to vendors · 4 bounces re-queued.
26Q filed · challans matched to the paisa · 2 mismatch tickets open with SLA · next sync: quarterly + on-demand

Illustrative product behaviour - values shown are examples.

Why it's hard today

Two directions, four quarters,
hundreds of counterparties.

TDS goes wrong quietly: a wrong section here, an undeposited challan there, a customer who deducted but never filed - and the gap only surfaces at ITR time, as blocked refunds or notices.

Deduct-side complexity

194C vs 194J vs 194Q vs 194-I - each with its own rate, threshold and due date. Wrong section or missed deduction means disallowance under 40(a)(ia) and interest on late deposit.

Receivable-side leakage

Customers deduct TDS from your collections - but if they don't deposit and file, the credit never reaches your 26AS/AIS. Unreconciled, that's income tax you effectively pay twice.

The communication burden

Vendors chase you for Form 16A; you chase customers for missing credits. Done over email and Excel, the loop stays open for quarters - and audit season becomes archaeology.

Where filing tools stop: ClearTDS and Winman file your returns. Finnoto reconciles both directions against 26AS, generates and distributes Form 16A, and runs the follow-up loop with vendors and customers - with tickets and SLAs, not reply-all threads.
How Finnoto runs it

From deduction to certificate
to closed mismatch.

1
Compute at source
Section, rate, threshold and PAN status applied at invoice level - deduction happens correctly before the payment is even queued.
2
Reconcile quarterly
Books vs 26AS/AIS both ways: TDS you deducted vs challans deposited, and TDS deducted on you vs credits actually reflecting.
3
Communicate automatically
Form 16A generated and emailed to vendors; mismatch annexures sent to customers; every thread tracked as a ticket with an SLA.
4
Close & carry forward
Corrections tracked to resolution, unresolved credits carried with ageing, and a clean TDS register ready for ITR and audit.
FAQ

Frequently asked questions

Does Finnoto reconcile TDS deducted BY us as well as ON us?

Yes - both directions. Deduct-side: your deductions vs challans vs 26Q filings, with Form 16A distribution. Receive-side: customer deductions on your revenue vs 26AS/AIS credits, with automated customer follow-ups for missing or short credits.

Can it send Form 16A to all vendors automatically?

Yes. Certificates are generated each quarter and emailed to every vendor on record, with bounce handling and a distribution log - so vendor finance teams stop emailing you for them.

What happens when a customer's TDS never reflects?

The gap stays as an aged open item with the full invoice-wise annexure, the customer keeps getting escalating reminders, and your team sees exactly how much credit is at risk before advance-tax and ITR deadlines.

Never discover a TDS gap at ITR time again.

Quarterly recon, automated certificates, and a follow-up engine that doesn't forget.

Talk to us