From 20682997661ff64b8beafa187aae6278e7d1b126 Mon Sep 17 00:00:00 2001
From: ljain112 <ljain112@gmail.com>
Date: Fri, 23 Jan 2026 20:30:07 +0530
Subject: [PATCH] fix: prevent precision errors in  discount distribution with
 inclusive tax

---
 erpnext/controllers/taxes_and_totals.py       |  5 +++
 .../tests/test_distributed_discount.py        | 38 +++++++++++++++++++
 .../public/js/controllers/taxes_and_totals.js |  6 +++
 3 files changed, 49 insertions(+)

diff --git a/erpnext/controllers/taxes_and_totals.py b/erpnext/controllers/taxes_and_totals.py
index 773bd25ec4a..41f532a98e7 100644
--- a/erpnext/controllers/taxes_and_totals.py
+++ b/erpnext/controllers/taxes_and_totals.py
@@ -671,6 +671,11 @@ class calculate_taxes_and_totals:
 			else:
 				self.grand_total_diff = 0
 
+			# Apply rounding adjustment to grand_total_for_distributing_discount
+			# to prevent precision errors during discount distribution
+			if hasattr(self, "grand_total_for_distributing_discount") and not self.discount_amount_applied:
+				self.grand_total_for_distributing_discount += self.grand_total_diff
+
 	def calculate_totals(self):
 		grand_total_diff = self.grand_total_diff
 
diff --git a/erpnext/controllers/tests/test_distributed_discount.py b/erpnext/controllers/tests/test_distributed_discount.py
index ae2381152ec..05db1496da8 100644
--- a/erpnext/controllers/tests/test_distributed_discount.py
+++ b/erpnext/controllers/tests/test_distributed_discount.py
@@ -59,3 +59,41 @@ class TestTaxesAndTotals(AccountsTestMixin, IntegrationTestCase):
 		self.assertEqual(so.total, 1500)
 		self.assertAlmostEqual(so.net_total, 1272.73, places=2)
 		self.assertEqual(so.grand_total, 1400)
+
+	def test_100_percent_discount_with_inclusive_tax(self):
+		"""Test that 100% discount with inclusive taxes results in zero net_total"""
+		so = make_sales_order(do_not_save=1)
+		so.apply_discount_on = "Grand Total"
+		so.items[0].qty = 2
+		so.items[0].rate = 1300
+		so.append(
+			"taxes",
+			{
+				"charge_type": "On Net Total",
+				"account_head": "_Test Account VAT - _TC",
+				"cost_center": "_Test Cost Center - _TC",
+				"description": "Account VAT",
+				"included_in_print_rate": True,
+				"rate": 9,
+			},
+		)
+		so.append(
+			"taxes",
+			{
+				"charge_type": "On Net Total",
+				"account_head": "_Test Account Service Tax - _TC",
+				"cost_center": "_Test Cost Center - _TC",
+				"description": "Account Service Tax",
+				"included_in_print_rate": True,
+				"rate": 9,
+			},
+		)
+		so.save()
+
+		# Apply 100% discount
+		so.discount_amount = 2600
+		calculate_taxes_and_totals(so)
+
+		# net_total should be exactly 0, not 0.01
+		self.assertEqual(so.net_total, 0)
+		self.assertEqual(so.grand_total, 0)
diff --git a/erpnext/public/js/controllers/taxes_and_totals.js b/erpnext/public/js/controllers/taxes_and_totals.js
index 87ec985ad18..e7b5b6dddab 100644
--- a/erpnext/public/js/controllers/taxes_and_totals.js
+++ b/erpnext/public/js/controllers/taxes_and_totals.js
@@ -623,6 +623,12 @@ erpnext.taxes_and_totals = class TaxesAndTotals extends erpnext.payments {
 				} else {
 					me.grand_total_diff = 0;
 				}
+
+				// Apply rounding adjustment to grand_total_for_distributing_discount
+				// to prevent precision errors during discount distribution
+				if (me.grand_total_for_distributing_discount && !me.discount_amount_applied) {
+					me.grand_total_for_distributing_discount += me.grand_total_diff;
+				}
 			}
 		}
 	}