Hi there, @deepak6.

I've got some insights to share regarding how to get rid with the error that you received when creating advance payment for suppliers in QuickBooks Online.

At this time, you can only create an advance payment in QuickBooks Online for TDS suppliers. To get this issue sorted out, I recommend enabling TDS for your supplier so you can add the advance payment. Once the bill is fully paid, you may disable the said option. 

To enable TDS for suppliers, while creating a new supplier, enter the PAN number of the supplier and check the box TDS Applicable. 

When enabling TDS for already existing supplier, follow the steps below:

1. Select on Expenses from the left menu.
2. Press on Suppliers at the top.
3. ​Click on the supplier name for whom you want to enable TDS and click Edit.
4. In the supplier information pop up, enter the PAN number and check the TDS Applicable checkbox.
5. Once TDS Applicable checkbox is checked you will have option to select Entity Type and default TDS section applicable for the supplier. Please select relevant options. TDS will be calculated for the supplier according to the threshold prescribed under the selected section during entry of a Bill or Expense. However, if you want to override threshold and enter the TDS amount manually, please tick the checkbox, which reads Override Calculation Threshold.
6. Hit on Save.

Here's a link that will give you complete details on how to set up the TDS in the system: TDS (Tax Deducted at Source).

I'd also like to add these references below that tackles about the different ways of recording an advance payment for TDS suppliers in QBO, depending on the situation that you're in:

• How do I record an advance payment made to a supplier with TDS withheld?
• How to apply the advance payment paid after deducting TDS on a Bill?

You can always get back to me here if you have any other questions. I'll be around to help you out. Take care!