A vendor provides you with some services, for which it promises to send you an invoice in a few days' time.

In the meantime, you make a down payment on the services for a total of INR 10,000, presenting the vendor with a check for INR 9,796 and withholding the remaining INR 204 as tax:

A week later, the vendor sends you the invoice, for a total of INR 20,000 – on which you have to withhold a total of INR 408. You post the invoice as normal, which gives the following accounting document:

You then clear the invoice against the down payment. The system takes into account the INR 204 of tax that you have already withheld, and creates the following accounting document to clear the down payment against the invoice, and clear the withholding tax account: