While crating the invoice >> Click on change discount type.
Unit price: If you select unit price option the discount will be reduced from the actual unit price of the product, and then the tax will be calculated.
Price with Tax: If you select price with tax option the discount will be reduced from the actual price with tax value of the product.
Net amount: If you select net amount option the discount will be reduced from the total net amount, and then the tax will be calculated
Total amount: If you select Total amount option the discount will be reduced from the total price.
Note: Though the method of calculation is different for each of them, if you apply discount in percentage, the value remains same due to mathematical reasons.