## Zoho Invoice — Product, features, payments, integrations, solutions, and help Index

Access the complete documentation index at:
https://www.zoho.com/en-ng/invoice/llms.txt

Use this file to discover all available documentation pages before proceeding.

# Withholding Tax

Withholding tax is a direct tax deducted at source by the payer on specific types of payments. The payer remits the withheld amount to the relevant tax authority on behalf of the payee.

In Zoho Invoice, you can enable withholding tax, apply it to invoices and bills at the line-item level, and record payments that account for the withheld amount.

## Enable Withholding Tax

Before applying withholding tax to your transactions, you need to enable it.

Here’s how:

*   Go to _Settings_ and select **Withholding Tax**.
*   Navigate to **Withholding Tax Settings**.
*   Enable the toggle next to _Do you want to enable Withholding Tax?_.
*   Click **Save**.

Withholding tax will now be enabled for your organisation.

## Create a Withholding Tax Rate

To create a withholding tax rate:

*   Go to _Settings_ and select **Withholding Tax**.
*   Navigate to **Withholding Tax Rates**.
*   Click **\+ New Rate**.
*   In the pop-up, enter the **Withholding Tax Name** and **Withholding Tax Rate**.
*   Select the **Tax Type**.
*   Click **Save**.

You can now use this withholding tax rate in transactions.

## Enable Withholding Tax for Customers

To enable withholding tax for a customer:

*   Go to **Customers** on the left sidebar.
*   Create a new customer or edit an existing customer.
*   In the _Other Details_ section, check the **Enable Withholding Tax for this Customer** option.
*   Click **Save**.

## Apply Withholding Tax to Invoices

When you create an invoice for a customer with withholding tax enabled, you can apply a withholding tax rate to each line item.

To apply withholding tax to invoices:

*   Go to **Invoices** on the left sidebar.
*   Create a new invoice or edit an existing invoice.
*   In the _Items_ table, choose the applicable **Withholding Tax** for each line item in the **TDS** column.
*   Review the _Withholding Tax_ section below the total.
*   Click **Save and Send** or **Save as Draft**.

The invoice will be saved with withholding tax details.

## Record Withholding Tax Payment

After applying withholding tax to invoices, you can record the withheld amount while recording payment.

### Record Invoice Payment with Withholding Tax

*   Go to **Invoices** on the left sidebar.
*   Open the invoice for which you want to record payment.
*   Click **Record Payment**.
*   Enter the payment details.
*   Select **Yes** next to _Withholding Tax Deducted?_.
*   Verify the **Withholding Tax Amount** displayed.
*   Click **Save as Paid**.

### Apply Withholding Tax to Bulk Customer Payments

When a customer pays multiple invoices in one payment, you can apply withholding tax invoice-wise in the same payment.

*   Go to **Payments Received** on the left sidebar.
*   Click **\+ New** or edit an existing payment.
*   Enter the required details.
*   Under _Unpaid Invoices_, review withholding tax due in the _Withholding Tax_ column.
*   Click **Add Withholding Tax** to include deductions.
*   Enter payment amounts for the invoices.
*   Click **Save**.

The payment will be recorded with withholding tax applied for the selected invoices.