diff --git a/erpnext/controllers/taxes_and_totals.py b/erpnext/controllers/taxes_and_totals.py
index 66232d7..049a837 100644
--- a/erpnext/controllers/taxes_and_totals.py
+++ b/erpnext/controllers/taxes_and_totals.py
@@ -312,11 +312,19 @@
 			last_tax = self.doc.get("taxes")[-1]
 			non_inclusive_tax_amount = sum([flt(d.tax_amount_after_discount_amount)
 				for d in self.doc.get("taxes") if not d.included_in_print_rate])
+
 			diff = self.doc.total + non_inclusive_tax_amount \
 				- flt(last_tax.total, last_tax.precision("total"))
+
+			# If discount amount applied, deduct the discount amount
+			# because self.doc.total is always without discount, but last_tax.total is after discount
+			if self.discount_amount_applied and self.doc.discount_amount:
+				diff -= flt(self.doc.discount_amount)
+
+			diff = flt(diff, self.doc.precision("rounding_adjustment"))
+
 			if diff and abs(diff) <= (5.0 / 10**last_tax.precision("tax_amount")):
-				self.doc.rounding_adjustment = flt(flt(self.doc.rounding_adjustment) +
-					flt(diff), self.doc.precision("rounding_adjustment"))
+				self.doc.rounding_adjustment = diff
 
 	def calculate_totals(self):
 		self.doc.grand_total = flt(self.doc.get("taxes")[-1].total) + flt(self.doc.rounding_adjustment) \
diff --git a/erpnext/public/js/controllers/taxes_and_totals.js b/erpnext/public/js/controllers/taxes_and_totals.js
index 2ece711..28fb649 100644
--- a/erpnext/public/js/controllers/taxes_and_totals.js
+++ b/erpnext/public/js/controllers/taxes_and_totals.js
@@ -388,9 +388,14 @@
 				var diff = me.frm.doc.total + non_inclusive_tax_amount
 					- flt(last_tax.total, precision("grand_total"));
 
+				if(me.discount_amount_applied && me.frm.doc.discount_amount) {
+					diff -= flt(me.frm.doc.discount_amount);
+				}
+
+				diff = flt(diff, precision("rounding_adjustment"));
+
 				if ( diff && Math.abs(diff) <= (5.0 / Math.pow(10, precision("tax_amount", last_tax))) ) {
-					this.frm.doc.rounding_adjustment = flt(flt(this.frm.doc.rounding_adjustment) + diff,
-						precision("rounding_adjustment"));
+					me.frm.doc.rounding_adjustment = diff;
 				}
 			}
 		}