Tally Accounting

TDS Special Features Tally

Posted by Asok K Nadhani on

Tax Deducted at Source (TDS) Special Features in Tally

TDS Special Features set up in Tally

We have explained TDS Set Up, creation of TDS related Leger Accounts, TDS Vouchers, Deposit of TDS to Government and various Statutory and other TDS Tracking Reports, These cover the entire topic of TDS management for most of the users.

However, there are special instances where some special treatment is required. Here, we cover such exclusive special instances which require elaboration for proper operation of handling such situations

TDS at Lower / Zero Rates set up in Tally

Sometimes, a Party may be allowed to get TDS Deducted at lower Rate by the Assessing Officer. In such case, the Assessing Officer issues a certificate for deduction of Tax at Lower Rate (herein referred as Concession Certificate) than the applicable rate specified under the section.

The Concession Certificate granted would be valid for the specified assessment year and the person named therein.

Now we discuss the exclusive steps of Deduction of TDS at Lower / Zero Rate

Ledger Account Master set up for lower TDS Rate in Tally

First you have to set the configuration option  at the Ledger Account  creation / alteration of the  Party  in favour of whom a Concession Certificate has been issued.

Ledger Account creation of Deductee has been explained earlier. Here we discuss abut points exclusively related to TDS deduction at Lower Rate.

At Ledger Account creation of the Party (Accounts Info>Ledger), click F12: Configure to get Party Ledger Account Configuration screen.  At  Party Ledger Account Configuration screen, set Yes at Allow Advanced Entries in TDS master.

TDS Deductee Ledger Configuration in Tally

Consequently, at Ledger creation screen, you get another option Use Advanced TDS Entries.

TDS Deductee Ledger Creation in Tally

Set Yes at  Use Advanced TDS to get Advanced TDS Entry screen . At Advanced TDS Entry screen , set :

  • Zero /Lower Rate : At Zero  Lower Deduction , set Yes to get  Zero/ Lower Deduction Details screen (F-3A), to set the required information  as explained next.
  • TDS in same voucher : For  Deduction of TDS in same voucher (for lower rate deduction), set Yes at Deduct TDS in same Voucher if applicable , and select the TDS nature of Payment  from the list.

TDS Deductee Ledger Advance TDS set up in Tally

TDS Deductee Ledger Zero / Lower Rate Set up in Tally

TDS Deductee Ledger Zero / Lower Rate set up in Tally

At  Zero / Lower Rate Details screen, set as follows:

  • Nature of Payment : At Nature of Payment column, select the applicable Nature of Payment from the list
  • ITax Section: At Section Number column, select  from the list of  Section / I Tax Rate

TDS Deductee Ledger Zero / Lower Rate selection list

  • Certificate Number / Date : At Certificate Number / Date column,
  • Lower Rate : Enter the Certificate Number & date issued by I Tax authority allowing Lower Rate Deduction.
  • Zero Rate : Enter the reference number of receipt of Form 15G/15H from the Party
  • Date of Applicability:  Enter the Start  Date (at Applicable From column) & End Date (at Applicable To column)  of  the I Tax Previous Year  of Concession Certificate / Form 15G/15H
  • Applicable Rate : At TDS, enter the Rate as follows:
  • Lower Rate : Enter the Applicable Lower Rate of TDS (and also for Ed Cess & S. Ed Cess, if applicable)
  • Zero Rate : The Zero Rates are auto carried in all columns and cursor do not move to these fields and returns to main entry screen .

TDS Zero / Lower  Rate deduction voucher entry in Tally

Journal Voucher entry with TDS deduction in same voucher has been explained earlier. Here we explain the points exclusively related to Zero / Lower Rate

Journal Voucher entry with Lower TDS

At Journal Voucher entry screen , enter as follows :

  • Expense Ledger Account : Select the Expense Ledger Account and enter the Amount to get TDS nature of Payment screen. Select the applicable TDS nature from the list.

TDS Nature of Payment Entry

  • Party Ledger Account :  Next select the Party Ledger Account to get TDS Details screen .
  • Lower Rate : You get TDS Details entry screen. The default values as entered at Party Ledger are carried. The Net Amount Payable to Party after TDS, is carried at the credit column in the main voucher screen .
  • Zero Rate : The TDS subscreen does not appear. The full amount (entered at Expense) is carried to the Party Ledger Account at Credit column in the man voucher  entry screen .
  • TDS Ledger Account : At main voucher screen ,
  • Lower Rate : Select the TDS Ledger Account. The computed amount of TDS is carried and shown at Credit Column
  • Zero Rate : The Ledger entry is complete and you do not have to enter any TDS Ledger account / amount

TDS Details entry for Lower Rate

TDS on Advance Payments

So far we have discussed TDS deduction on Expense. Sometimes, Advance is paid to supplier of service etc, before the expense has been incurred. Normally this is in form of some lump sum amount in advance. As per rules, TDS is to be deducted on Advance payment also. Later on when the final payment is made, the balance TDS is deducted.

Advance receipt with TDS Deduction

You have to create a Payment Voucher in Single Mode as explained earlier. Here we explain points exclusively related to TDS in Payment Voucher.

Advance Payment with TDS Deduction

At Payment Voucher Entry screen in single entry mode, after entry of Cash / Bank Account, enter the Ledger Accounts details at Particulars column, as follows :

Deductee Ledger Account : At the first ledger  (at Particulars column), select the Party Ledger Account whom advance payment is being made to (Bill by Bill must be se for the Party). Enter the amount paid to get the Bill Allocation screen. At Type Ref, select Advance. At Due Date / Credit Days, the Due Date / Credit Days is carried from Party Master, which you may change.

Bill Allocation details in Voucher entry in Tally

TDS Ledger Account : Next select TDS Ledger Account to get TDS Details screen. The figures are carried as default. The amount of TDS is carried against TDS Ledger account as negative figure in the voucher main screen.

TDS Deduction Details entry in Voucher in Tally

Enter Voucher Narration and save the voucher.

Adjustment of Advance  / TDS against Bill in Tally

Later on, the expense is to be booked and the Advance is to be adjusted through Journal Voucher. TDS is deducted on Balance Amount paid after adjustment of Advance, and TDS already deducted from Advance Payment is also adjusted. The net Amount  payable (after TDS adjustment) is credited to the Party Account.

Journal Voucher for Advance Adjustment & Expense Booking in Tally

At Journal entry screen , enter as follows:

Expense Ledger Details entry in Voucher : Select the Expense Ledger  to get TDS Nature of Payment screen.  At TDS Nature of Payment screen, select the applicable nature of Payment and enter the total amount of expense. This is carried at the main voucher screen at  Debit Column against the Expense Ledger  Account

TDS Nature of Payment entry in TDS Voucher in Tally

Party Ledger Details entry in Voucher : Select Party Ledger to get TDS Details screen. At TDS Details screen :

  • Select Agst Ref and select the Ref of Advance paid to adjust the advance.
  • Next select New Ref and create the new Ref for the Balance Amount of the Bill after adjustment of Advance

The default TDS Ledger , Amount etc are auto carried.

Bill Allocation Details entry in Voucher :Next you get the Bill Allocation screen ,  At Bill Allocation screen ,  enter the Bill details in the same way as entered at TDS Details screen

  • Select Agst Ref and select the Ref of Advance paid to adjust the advance.
  • Next select New Ref and create the new Ref for the Balance Amount of the Bill after adjustment of Advance.

Bill Allocation details  entry in Voucher in Tally

TDS Ledger Details  entry in Voucher: At Main Voucher screen, select TDS Ledger. The TDS deducted in the voucher (on the balance amount paid after advance adjustment, as shown in is auto carried at the Credit Column.

TDS Deduction Details entry in Voucher in Tally

Enter Voucher Narration and save the Voucher.

Final Bill Payment to TDS Deductee in Tally

Having booked the final expenses / TDS Deduction through Journal Voucher and having adjusted the Advance Paid, you may now make payment of Balance payable through Payment Voucher. The summary of Amount Paid and Payable is shown below for reference

 Amount PaidTDS  DeductedNet  Amount Paid
Advance50005004500
Final(12000-5000) =     70007006300
Total12000120010800

At Payment Voucher, enter as follows :

Final Bill Payment to TDS Deductee in Tally

Party A/c : Select  Party Account and enter the Net Amount Payable to get Bill Allocation  screen.

At Bill Allocation  screen, select Agst Ref and select the Bill Reference showing the Balance Amount payable for the Reference.

Bill Allocation of Final Payment in Tally

Cash / Bank A/c: Select the Cash / bank A/c through which the Payment is being made. The Net Amount  payable is carried at Credit  column. Enter the Voucher Narration and save the Voucher

TDS  Reversal on Job Cancellation  Tally

Sometime a Bill which is already entered may be cancelled (Job not done), or the final Bill may be reduced (Less Job not done). In such case, the  Buyer who entered a TDS Journal Voucher for the full bill amount earlier having deducted TDS thereon, would issue a Debit Note on the Party and adjust the Expenses Amount as well as TDS deducted on it.

TDS Deduction on Expenses in Tally

First a Journal Voucher is created for the Booking of Expenses, TDS Deduction thereon and Net Amount Credit to the Party, as explained below :

TDS Deduction on Expense in Tally

At Journal Voucher entry screen, enter as follows:

a.Expense Ledger: Select Expense Account  to get  TDS Type of payment. Screen .

Nature of Payment entry in TDS Deduction  Voucher in Tally

At  TDS Type of payment. Screen , select  the TDS Type of payment and enter  the Amount of Expenses. The amount is carried in voucher in Debit Column

b.Party Ledger : Select Party Account  to get. TDS Details screen .  At TDS Details screen , enter TDS Details.  

TDS Deduction Details entry in Tally

c.Bill Allocation : Next you get Bill Allocation screen .

Bill Allocation details entry in Voucher in Tally

At Bill Allocation screen , enter Bill Allocation Details. 

  • Select New Ref and enter the Gross Amount of Bill as Credit.
  • Select  New Ref and enter the TDS Amount of Bill as Debit

The Net amount after TDS deduction is carried in main voucher entry screen in Credit Column

d.TDS Ledger : Select TDS Ledger Account. The TDS deducted as shown in TDS details screen is carried in Credit column.

 Save the Journal Voucher .

Debit Note for TDS Adjustment in Tally

Later on, a Debit Note (of Rs 4000)  was issued on the Party as Part of the Job   was not done (Job for Rs 16,000 out of 20,000 was only done).

Expense Debit Note / TDS  entry in Tally

At Debit Note entry screen in  Accounting Invoice  mode, enter as follows:

a.Party Account : Select the party Account at the Header

b.Expenses Account : Select the Expenses Account at Particulars column to get Nature of Payment Details screen . 

At Nature of Payment Details , select the Nature of Payment and enter the expenses amount of Debit Note, which is then carried at the debit column in the main voucher entry screen

Nature of Payment entry in Voucher in Tally

c.TDS Account : Next select the TDS Ledger to get TDS Details screen . 

TDS Details in Debit Note entry in Tally

The TDS Amount is carried at the Main Voucher entry screen as negative amount.

Final Payment after TDS in Tally

Now make the Final Payment of the net Payable Amount through Payment Voucher after adjusting the Debit Note.

Dedcutee Final Payment Voucher in Tally

In Payment Voucher, enter as follows:

a.Party Account : Select Party Account to get Bill Allocation screen. At Bill allocation screen, select  Agst Ref and select the pending reference. The amount (19600-3920=15680) is carried against Party Account at Debit Column.

Bill Allocation of Final Payment in Tally

b.Cash / Bank Account : Select Cash Bank Account. The Net amount payable is carried at Credit Column.

Enter Narration and save the Voucher.

TDS Deposit to Government in Tally

Having deducted TDS, you have to deposit the TDS to government within stipulated time. TDS deposit has been explained earlier. Here we describe the Payment Voucher of Deposit of Balance Tax.

At  Payment Voucher entry screen, enter as follows:

Payment Voucher for TDS Deposit to Government in Tally

a.Statutory Details : Click S:Stat Payment button (and select TDS) to get Statutory Payment Screen.  At Statutory Payment Screen, enter the details as explained earlier.

TDS Deposit  Voucher entry in Tally

b.Bank Account  : At Header, select the Bank Account through which the Payment is made

c.TDS Account : At Particulars column, select the  TDS Account to get TDS Details screen. The Pending Reference details would be shown. Select them one by one as explained earlier. The Bills selected at TDS Details screen would be carried and shown in Main voucher screen

TDS Details display in Voucher entry

d.Payment Details : At Provide Details , set Yes to get the Payment Details screen. Enter the details as explained earlier

TDS Deposit Details in Voucher entry in Tally

Payment of Interest / Penalty along with TDS

If the TDS deposit is delayed (or remain unpaid), in addition to the TDS, Interest & Penalty is also to be made alongwith TDS Deposit.

Next example shows :

  • Expense Booking entry screens & TDS deducted thereon
  • Creation of Interest & penaly Ledger Accounts for Late payment of TDS
  • Payment Voucher for TDS (alongwith Interest & Penalty) to Government
  • Printing of TDS Challan, alongwith Interest & Penalty

Interest / Penalty Ledger Accounts

Expense Leger Account creation has been explained earlier. In the same way, create Interest & Penalty Ledger Accounts.

Expense / TDS Deduction entyr in Tally

Create the Journal Voucher for Expenses  & corresponding deduction of TDS, as explained earlier.

Expenses  / TDS Voucher entry in Tally

a.Expense Ledger Account : At Journal Voucher entry screen, on selection of Expense Account, you get the TDS Nature of Payment screen, The default nature of Payment is carried, as discussed earlier.

TDS Nature of Payment entry in Voucher in Tally

b. Deductee Ledger Account TDS Details entry : At Journal Voucher entry screen, on selection of Party Ledger Account, you get the TDS Details

Next you get TDS details screen showing the computation details of TDS

Deductee Ledger Account TDS Details entry in Tally

c. TDS Ledger Account : At Journal Voucher entry screen , on selection of TDS Ledger Account, the Amount of TDS as shown in TDS Details screen , is carried at the credit column

d. Bill Allocation : Finally, you get the Bill Allocation screen

Bill Allocation details entry in Voucher in Tally

Enter  Voucher Narration & save the voucher

TDS Deposit Voucher with delayed Payment & Interest in  Tally

Now enter the Payment Voucher for  Deposit of TDS alongwith Interest & Penalty, for late deposit. Creation of Ledger Accounts for Interest & Penalty, has been explained earlier.

TDS Payment Voucher with Interest & Penalty in Tally

At  Payment Voucher entry  (in single mode entry) screen, enter as follows :

  • Cash Bank Account : At the header, select the Cash / Bank A/c from which payment made.
  • Ledger Account details : At Particulars column, enter as follows:

TDS Details entry in TDS Deposit Voucher in Tally

  • TDS Ledger: Select TDS Account to get TDS Details screen . At TDS Details , select Agst Ref. The pending Ref & corresponding details are shown at Tax Details.

TDS Details entry in TDS Deposit Voucher

Select the respective details from Tax Details screen, The TDS Amount is carried at Tax Details screen and at the main voucher entry screen.

  • Interest Ledger : Select Interest Account . Select Interest at payment Type list. Enter Interest Amount
  • Penalty Ledger : Select Penalty Account . Select Penalty at payment Type. Enter Penalty Amount

Payment Details : After entry of Ledger Accounts, at main voucher entry screen , at Provide Details,  set Yes to get Payment details screen . Enter the Payment Details and then get back to the main voucher  entry screen .

Enter Voucher Narration. Save the Payment Voucher.

TDS Deposit Details entry in Voucher in Tally

TDS Deposit Challan Printing for Payment with Interest & Penalty in Tally

Having  created the Payment  Voucher of TDS, Penalty & Interest to government, you may print the Challan as described earlier.

On entry of TDS payment voucher, click P:Print button to get the Payment Voucher Printing screen, to print  TDS Challan / Payment Advice (if required), as explained earlier

TDS Challan with Interest & Penalty Payment

This shows a complete cycle of TDS Deduction from Bill, Payment of Service Provider, Deposit of TDS to Government and Printing of Challan.

06 Multiple TDS Nature Voucher entry in Tally

Now we Explain a case for Purchase Voucher entry for a Purchase Bill. A Purchase Bill for Rent for Plant & Machinery & Rent for Land Building (separate Nature of Payment) in one Bill is entered, with TDS Deduction.

TDS set up in Ledger Accounts in Tally

We describe the following Ledger Account creation related to Purchase & TDS Accounting

a. TDS set up in Expenses Ledger Account : Create the Expenses Ledger Account (e.g Rent). Only one ledger account has been created for both type of Rent . At Default Nature of Payment, one of the Nature of Payment has been selected as default

Expense Ledger Creation

b. TDS set up in TDS Ledger Account : Create the TDS Ledger Account (e.g Rent). Only one TDS Ledger account has been created for TDS for both type of Rent . At Default nature of Payment, one of the Nature of Payment has been selected as default.

Expense Ledger Creation

c. TDS set up in Deductee Ledger Account : Create the Deductee Ledger Account e.g Supplier.

TDS details set up in Deductee Ledger Account in Tally

At Ledger Account creation screen, at Statutory Details screen, set as follows:

  • at Is TDS Deductible, set Yes
  • at Deductee Type, select the Deductee Type from list

at Use Advanced TDS Entries, set Yes to get Advanced TDS screen

Advanced TDS options set up in Tally

At Advanced TDS screen,  set Yes at Deduct TDS in same voucher, to get Multiple Nature of Payment screen, to allow TDS for multiple Nature in one voucher.

Multiple TDS Nature of Payments entry  in Voucher

At Multiple Nature of Payment screen, select the Nature of Payment, one by one (and then select End of List to terminate)

Tax Information : At Main Ledger entry screen , enter the PAN Details etc.

Having created the Ledger Accounts, you are ready to enter the Purchase Voucher

Voucher  entry with TDS Deduction in Tally

At Gateway, click F12:Configure>Voucher Entry and set Yes at Allow Expenses / Fixed Assets in Purchase Voucher entry, to allow Expense Accounts (Rent) in Purchase Voucher

At Voucher entry screen, click F12:Configure and set Yes at Allow Alteration of Nature of Payment, to allow change in default nature of Payment, as required.

Purchase Voucher with TDS Entry in Tally

Now make entry in the Purchase Voucher, as follows:

a. TDS Nature of Payment set up in Expense Ledger: On entry of Rent Ledger account at the main voucher screen, you get TDS Nature of Payment, with default TDS  nature of Payment as specified in Ledger creation screen (e.g Rent on Plant / Machinery), which you may change (e.g. to Rent on Land, Building).

TDS Nature of Payment entry in Voucher in Tally

b. TDS Details entry: Next, select TDS Ledger Account at the main voucher screen to get TDS details screen, where in you again get the default Nature of Payment selected, which you may change. On selecting the Nature of Payment, the TDS is computed accordingly and shown in TDS Amount column.

Expense & TDS details entry in Voucher in Tally

In the same way, enter the Expense Ledger for next Payment Type (though the Ledger Account is same, Type of Payment is different).

Now enter the TDS nature of Payment

Nature of Payment details entry in Voucher

In the same way, enter TDS  Details screen

TDS details  entry in Voucher in Tally

Bill Allocation  : Finally you get Bill Allocation screen (when you reach the Voucher Total Amount field), to enter the details.

Bill Allocation details entry in Tally

TDS Computation Statement in Tally

On entry of the Purchase Voucher, you get the TDS Computation details statement as explained earlier.

TDS Computation Statement in Tally

TDS Computation details display in Tally

The successive subordinate details screens are shown when you drill down through the Taxable Expenses & Advances in the Computation details screen.

Taxable Expenses & Advances Details of TDS Computation Statement

Taxable Expenses & Advances Details display in Tally

Deductee details of TDS Computation Statement

Deductee details of TDS Computation Statement

Voucher entry for TDS Deposit in Tally

Now create a Payment Voucher for the Tax to be deposited, as explained earlier.

TDS  Deposit Voucher entry in Tally

TDS Statutory Payment Details Entry in Voucher : At Payment Voucher entry screen, Click S:Stat Payment button to get Statutory Payment Details screen.

At Statutory Payment Details screen enter the details. At Nature of Payment, select All Items (to make Payment for all the relevant Nature of Payments. 

Statutory Payment Details in TDS Deposit Voucher

The figures of computed TDS details are carried in the Main Voucher against TDS Ledger Account, at Credit Column

TDS Deposit Details entry in Voucher : At Main Voucher screen, at Provide Details, set Yes to get payment Details screen, to enter the Payment Details, as explained earlier.

TDS Deposit Details entry in Voucher

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