Commerce, Tally PRIME

Tax Deducted at Source Accounting in Tally PRIME

Posted by Asok K Nadhani on

Tax Deducted at Source (TDS) in Tally PRIME

Certain payments are subjected to Income Tax Deduction at source (TDS). Such TDS will be deducted at time of payment or credit, whichever is earlier. Here we describe TDS by Deductor, for such specified payments made (other than Salary).

TDS Activation for the Company in Tally PRIME

To enable TDS features for the Company, At Company Features (F11:Features) screen (F-1A), under Taxation section, at Enable Tax Deducted at Source, set Yes, to get Company TDS Deductor Details entry screen (F-1B)

TDS Deductor details entry in Tally PRIME

At Company TDS Deductor  Details screen (F-1B), enter the Company TDS Details.

TDS Deductor Responsible person details entry in Tally PRIME

At Company TDS Deductor  Details screen (F-1B), set Yes at Set / Alter details of person responsible and enter Person Responsible Details (F-1C).

TDS Nature of Payment Masters creation in Tally PRIME

I Tax department has classified various Nature of Payment for TDS. So, first you have to create the Nature of Payments Masters records applicable to your organisation.

Select GoT>Create. At Masters creation screen, under Statutory Master section, select TDS Nature of Payment to get TDS Nature of Payment screen (F-2A). Enter the respective details. You may click H:Helper toggle button to get list of I Tax section for each Type of TDS and corresponding Payment Code/ emittance Code. The Codes are also available at the reverse of Challan 281.

TDS Ledger Account

Ledger Account creation has been explained earlier.

TDS Ledger Account creation

Select GoT>Create>Ledger to create TDS Ledger Account and enter the following details (F-3A).

  • Name : Enter the TDS Ledger Account Name.
  • Parent Group : At Under, select Duties & Taxes
  • Duty Type: At Type of Duty/ Tax, select TDS from the list
  • TDS Nature of Payment: At Nature of Payment, select the Nature of Payment related to the TDS Account. To create new record of Nature of Payment from within Ledger Account creation, at List of TDS Nature of Payment, select Create (or press Alt+C) to get Nature of Payment entry screen. Enter the details and save the Nature of Payment record. Now, you can select Nature of Payment from the list which incudes new record just created.

TDS Ledger Account Configuration

At TDS Ledger Account creation (F-3A), click F12:Configure to set up Configuration options (F-3B)

TDS Deductee Ledger Account

Ledger Creation / Alteration has been explained earlier. We describe additional details set up for TDS Deductee Ledger Account.

TDS Deductee Ledger Account Set Up

Select GoT>Create > Ledger to get Ledger creation screen (F-4A). Enter the details for Account Ledger creation, as usual.

TDS Deductee Ledger Statutory Details set up

At Statutory Details section of TDS Deductee Ledger entry screen (F-4A), at Is TDS Deductible? set Yes and enter following details :

  • TDS Nature : At Treat TDS as Expenses, set No (where TDS Amount is deducted from the amount Payable to the Party. So, TDS is not company’s expenses)
  • Organisation Type: At Deductee Type, select the Deductee Type from the list, according to the nature of constitution of the Party.
  • TDS Voucher : At Deduct TDS in same Voucher, set Yes if TDS is deducted in same Voucher

PAN Details entry in TDS Ledger Account  

At Right part of Ledger entry screen (F-4A), under Tax Registration details, enter Address & PAN Details (PAN is mandatory). Set Yes at Provide PAN details (F-4B) and enter Effective Date and Name of Deductee on PAN Card (F-4B).

TDS Deductee Ledger Configuration Set Up

At TDS Deductee Ledger Creation (F-4A), click F12:Configure to get Ledger Configuration screen (F-4C), similar to TDS Ledger Configuration screen (F-4C).

At Ledger Configuration (F-3B), set Yes at Provide TDS details and then enter the TDS details for the Deductee Ledger Account (F-3A) at Statutory Details  section of the TDS Deductee Ledger creation / alteration screen (F-3B).

TDS Deductible Expense Ledger Account

Expense Ledger creation has been explained earlier. We describe points exclusively related to TDS, for Creation / Alteration of Expense Ledger from which TDS is deducted.

TDS Deductible Expense Ledger Account set up

Select GoT>Create>Ledger to get Ledger Account creation screen (F-5A)

At Expense Ledger Account creation / Alteration (F-5A), You have to fill up details similar to TDS Ledger Account creation (F-3A). Click F12:Configure and set configuration options as explained in TDS Ledger Account Configuration (F-3B)

TDS Deduction Journal Voucher

Select GoT>Voucher, Click F7 and create a Journal Voucher (F-6A) to book the expense and adjust the TDS linking with the Deductee Account.

F-6A: TDS Deduction Journal Voucher

At Journal Voucher screen (F-6A), first enter details of TDS deductible expenses ledger account and select the TDS Nature of Payment from the list (F-6B).

F-6B: TDS Nature of Payment selection

Next, select the Party Ledger Account. The TDS, as deductible as per rules, would be internally auto computed and the net Amount (after deduction of computed TDS) would be shown against the selected Party ledger (F-6A).

Next, select TDS Ledger Account. The internally auto computed TDS Amount would be shown in the credit of TDS Ledger Account (F-6A).

Tax Analysis : To view the TDS details, at Voucher entry screen (F-6A), click O:Related Reports button. Select TDS-Tax Analysis (F-6D) option.

F-6C: Tax Analysis details

Now get TDS Tax Analysis screen showing the details of Tax Analysis (F-6D)

F-6D: TDS Tax Analysis

In the main voucher screen (F-6A), enter the Voucher Narration and save the Voucher.  

TDS Deposit to Government

Having made TDS Adjustment through Journal Voucher, now you may deposit the TDS deducted to the Government.

Select GoT>Voucher. Click F5:Payment to create a Payment Voucher for Deposit of TDS to Government (F-7A).

At Payment Voucher screen (F-7A), click F:Autofill (Ctrl+F) button (F-7B) to get Autofill screen (F-7C). At Type of Transaction, select Stat Payment. Fill up TDS related details. Finally Select the Bank Account.

At Main Voucher screen (F-7A), enter the TDS ledger account and amount. At TDS Nature of Payment screen, select the pending TDS reference (F-7D).

At Main Voucher screen (F-7A), enter the Voucher Narration

TDS Payment Voucher Configuration set up

At TDS Payment Voucher screen (F-7A), Click F12:Configure to set the Configuration options (F-7E).

TDS  Payment Voucher Screen (F-7A) में F12:Configure clcik कर  Voucher Configuration option set करे  (F-7A).

TDS Deposit Challan Printing

On entry of Payment Voucher for deposit of TDS (F-7A), at Payment Voucher entry screen (F-7A), click P:Print button to get the Payment Voucher Printing screen (F-8A).

Challan Printing Configuration set up

At TDS Challan Printing screen (F-8A), Click C:Configure button and set Challan Printing Configuration options and set Yes at Print as TDS Challan (F-8A).

TDS Challan Printing  

Click P:Print button to print the challan (F-9A) on printer.

TDS Reports

Select Display>Statutory Reports>TDS Reports to get TDS Reports Menu (F-9A).

10 TDS Challan Reconciliation

At TDS Reports menu (F-9A), select Challan Reconciliation. Using Toggle button F8:Show All /Show Pending, you may view all paid Challans / enter details of Pending Challans (and Type Y to save).

TDS Form 26Q

Form 26Q is Quarterly Return of TDS in respect of all payments other than salaries. The top portion shows the statistics of vouchers from where you may drill down to view the related voucher list.

Form 26Q Reports Printing : At TDS Reports menu (F-9A), select Form 26Q to get the Form 26Q dully filled up, for the specified Period (F-11A).

TDS Form 27Q

Like TDS Form 26Q, Form 27Q is related to Payments to NRI.

At TDS Reports menu (F-10A), select Form 26Q to get the Form 26Q dully filled up, for the specified Period, in respect of, if any.

Tax Deducted at Source (TDS) – Key Points

  • F11 Company Features में  Enable Tax Deducted at Source में  Yes set कर  Company me TDS activate करे
  • TDS Ledger Account create कर  TDS details set करे. अगर  कई  तरह  के  Nature of Payments का  TDS deduction हो  तो  हर  nature of Payment के  लिए  अलग  TDS ledger create करे, इस  से  reconciliation करना और  TDS deposit करना  आसान  होगा.
  • Party Ledger Account me TDS details set करे
  • TDS Deductible Expenses Ledger Account में  TDS details set करे
  • TDS Deduction के  Journal Voucher में  TDS details entry करे
  • TDS deduction के  बाद  government में  TDS  deposit के लिए   Payment Voucher entry करे  और  TDS challan print करे
  • TDS challan द्वारा  TDS Payment government को  deposit कर  receipt collect करे
  • Display>Statutory Reports>TDS Reports  select कर Form 26Q/27Q Quarterly Return print कर  government को  submit करे

Key Point Audio