TDS Knowledge Base PDF

Tax Deducted at Source in
Tally.ERP 9
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Version: Tax Deducted at Source in Tally.ERP 9/eLearning/1.0/June 2012

Contents
Tax Deducted at Source in Tally.ERP 9 ...................................................................................... 1

Configuring TDS in Tally.ERP 9 ........................................................................................................... 2
Enabling TDS in Tally.ERP 9 ........................................................................................................................... 2
TDS Statutory Masters ..................................................................................................................................... 3
Recording Transactions ......................................................................................................................... 5
Booking Expenses and Deducting TDS ............................................................................................................ 5
Booking Expenses and Deducting TDS Later ................................................................................................ 12
TDS Deduction at Lower Rate ........................................................................................................................ 19
TDS Deduction at Zero Rate .......................................................................................................................... 23
Deducting TDS on Payments .......................................................................................................................... 29
Payment of TDS .............................................................................................................................................. 32
TDS Reports ......................................................................................................................................... 40
Computation ................................................................................................................................................... 41
Challan Reconciliation ................................................................................................................................... 46
Return ............................................................................................................................................................. 48
eTDS Returns .................................................................................................................................................. 61
Outstandings ................................................................................................................................................... 66
Exception Reports ........................................................................................................................................... 73
i
Tax Deducted at Source in Tally.ERP 9
Tax deducted at source is one of the modes of collecting Income Tax from the assesses. In simple
terms, TDS is the tax deducted from the third parties (deductee) by the payer (deductor) and deposited
into the designated banks within the specified period. The Assessee who deducts tax at source is liable
to issue a certificate to the deductee for the amount deducted alongwith payment details, so that the
same can be submitted to Income Tax authorities.
Features of TDS compliant Tally.ERP 9

 Simple, quick & User friendly.
 Maintains complete tracking of each transaction.
 Allows deduction of TDS at the time of booking expenses in the same voucher or separately at a
later date.
 Allows deduction of TDS at Lower / Zero Rate and deduction of TDS on multiple expenses of
single nature of payment type in a single voucher.
 Allows computation of TDS on expenses partly subject to tax and on advance payments.
 Provides facility to compute TDS with / without considering Surcharge Exemption Limits for
parties.
 Provides retrospective surcharge calculations for prior / current period.
 Allows partial / full payment of Tax deducted at source.
 Provides automatic computation of TDS amount for each nature of payment.
 Generates TDS Certificates, TDS Outstanding report and various other TDS related MIS
Reports.
 Facilitates automatic generation of quarterly as well as annual eTDS returns in the physical as
well as e-Return formats.
 Allows Challan reconciliation facility to keep track of issue of TDS certificates and remittance
through challans.
 Also generates consolidated TDS Certificates, Challans and Annual Returns for statutory and
tax audit purposes.
1
Configuring TDS in Tally.ERP 9

TDS in Tally.ERP 9 manages all the TDS and eTDS requirements of the business and automates the
TDS management with accurate tax computation. It further assists you to file tax returns in electronic
format, thus minimizing the errors during entry.
Enabling TDS in Tally.ERP 9

Go to Gateway of Tally > F11: Features > F3: Statutory & Taxation
 Set Enable Tax Deducted at Source (TDS) to Yes
 Enable Set/Alter TDS Details and press Enter
 In Company TDS Deductor Details screen,
 Specify Tax Assessment Number (TAN) of the company
 Specify the Income Tax Circle / Ward (TDS) details of the deductor
 Specify the Deductor Type as Others for the Deductor Types other than government
 Specify the Name of person responsible and his/her designation
 Press Enter to Accept the screen
The Statutory and Taxation screen is as shown:
Figure 1. Statutory and Taxation Features screen
2
TDS Statutory Masters

The statutory masters contains details of TDS nature of payments, Deductee Types, rate of TDS for
each nature of payment and period of applicability. These masters are loaded automatically soon after
enabling TDS in Tally.ERP 9.
TDS Nature of Payments

Go to Gateway of Tally > Display > Statutory Info. > TDS Nature of Pymts
Figure 2. TDS Nature of Payments
 Select a Nature of Payment from the list and press Enter
Figure 3. TDS Nature of Payments
3
Deductee Types
Go to Gateway of Tally > Display > Statutory Info. > Deductee Types
Figure 4. Deductee Types
 Select a Deductee Type from the list and press Enter
Figure 5. Deductee Types
4
Recording Transactions
Booking Expenses and Deducting TDS
Illustration 1:
On 01-04-2011, Universal Enterprises received a bill (Vide No. PCS/001/11-12) from Prithvi Con-
sulting Services, for Rs. 48,000/- towards Consultancy Charges. Consultancy Charges is subject to
TDS under ‘Fees for Professional or Technical Services’ Nature of Payments.
The applicable Income tax rates for payment of ‘Fees for Professional or Technical Services’ to
‘Company Resident Deductee’ Type is TDS - 10%
Setup :
 Create the ledger Prithvi Consulting Services under Sundry Creditors with
 Maintain balances bill-by-bill to Yes
 Is TDS Deductable to Yes
 Deductee Type as Company - Resident
 PAN/IT No. as AGBPP8210B
 Create the ledger Consultation Charges under Indirect Expenses with

 Inventory Values are affected as No
 Is TDS Applicable as Yes
 Default Nature of Payment as Fees for Professional Or Technical Services
 Create the TDS tax ledger TDS on Consultancy Charges under Duties & Taxes with
 Type of Duty/Tax as TDS
 Nature of Pymt as Fees for Professional Or Technical Services
Create Journal Voucher

Go to Gateway of Tally > Accounting Vouchers > Press F7: Journal
1. Press F2 and specify the voucher date
2. Select the required expense ledger in the Debit field and press Enter
3. Enter the Amount
4. In the Expense Allocation screen, under TDS Nature of Payment Details, select the required TDS
ledger
5. The amount in the Assessable Value is defaulted
6. Select the required party ledger in the Credit field and press Enter
7. In the TDS Details screen, provide the following details:
 Select New Ref as the Type of Ref. field
 By default Jrnl / 1-1 is prefilled in the Name field
5
 Select the required Nature of Payment

 Select the required TDS ledger
 The Assessable Amount field is defaulted with the amount specified against the expenses
ledger
 Set Yes in Deduct Now field (If the deduction has to be done later, this option needs to be set to
No)
 The tax amount deducted at source is displayed in the TDS Amount field
 The amount (after deducting TDS) payable to the party is displayed in the Payable Amount
field
The TDS Details screen is displayed as shown:
Figure 6. Completed TDS Details Screen
 Press Enter to accept TDS Details

8. The Payable Amount calculated in the TDS Details screen will be defaulted in the Credit field
9. Press Enter to view Bill–wise Details screen
10.In Bill–wise Details screen,
 Select New Ref as the Type of Ref
6
 In the Name field, enter the bill name

 Skip the Due Date or Credit Days field
 Accept the default amount allocation and Dr/Cr
 Press Enter, select New Ref as Type of Ref and Enter Bill name
 Press Enter to accept the amount allocation
The Bill-wise Details screen appears as shown:
Figure 7. Bill-wise Details
In the above screen, the amount payable to the party after deduction of TDS is
displayed separately and the TDS deducted amount is displayed separately for easy
identification of bill amount in the outstanding statement.
11.Select the required TDS ledger in the Credit field and press Enter to accept the amount
7
The Journal Voucher is displayed as shown:
Figure 8. Journal Voucher
12.Press Enter to accept
Illustration 2:
On 13-04-2011, Universal Enterprises received a Bill (Vide No. SAA/102) for Rs. 80,000/- from
Southern Advertisement Agency towards Advertisement Expenses. The applicable Income tax rates
for ‘Advertisement Expenses’ payable to ‘Contractors’ is TDS - 2%
Setup :
 Create the ledger Southern Advertising Agency under Sundry Creditor with
 Deductee Type as Partnership Firm
 PAN/IT No. as AQBGG8570B
 Create the ledger Advertisement Expenses under Indirect Expenses with

Inventory Values are affected as No
 
8

 Default Nature of Payment as Payment to Contractors (Advertisement Contractors)
 Create the TDS tax ledger TDS on Advertising Expenses under Duties & Taxes with
 Nature of Pymt as Fees for Payment to Contractors (Advertisement Contractors)
 In F12: Purchase Invoice Configuration, set Use Common Ledger A/c for Item Allocation
and Use Defaults for Bill Allocations to No
Create Purchase Voucher

Go to Gateway of Tally > Accounting Vouchers > F9: Purchase
1. Press Alt + I for Account Invoice mode
3. In Party’s A/c Name field, select the required party ledger from the List of Ledger Accounts
4. Under Particulars, select the required expense ledger and press Enter
5. Type the Amount and press Enter to view TDS Nature of Payment Details screen
6. The TDS Nature of Payment Details screen displays the Nature of Payment and the Assessable
Value of the expenditure.
7. Select the required TDS ledger from the List of Ledger Accounts and press Enter to view the TDS
Details screen.
8. In the TDS Details screen,
 By default Purc / 1-1 is pre-filled in the Name field
 Select the required Nature of Payment ledger
 The Assessable Amount field is defaulted and the TDS Amount is calculated automatically
based on the applicable TDS rates
The TDS Details screen appears as shown:
9
Figure 9. TDS Details
 Press Enter to accept the TDS Details screen

9. In the Bill-wise Details screen,
 Accept the default amount allocation and Dr/Cr and press Enter
 Select New Ref as Type of Ref and enter bill name
10
The Bill-wise Details screen appears as shown:
Figure 10. Bill-wise Details screen
 Press Enter to accept the amount
11
The Purchase Voucher is displayed as shown:
Figure 11. Purchase Voucher
10.Press Enter to accept
Booking Expenses and Deducting TDS Later

Illustration 3:
On 20-04-2011, Universal Enterprises received a Bill (Vide No. CE/001) for Rs. 15,000/- from Citi
Enterprises towards commission charges. The company intends not to deduct TDS on the above
transaction at the time of booking the expenses.
Setup :
 Create the ledger Citi Enterprises under Sundry Creditors with
 Deductee Type as Body of Individuals
 PAN/IT No. as ARTBB4560C
 Create the ledger Commission Expenses under Indirect Expenses with

12
 Default Nature of Payment as Commission or Brokerage

 Create the TDS tax ledger TDS on Commission under Duties & Taxes with
 Nature of Pymt as Commission or Brokerage

Go to Gateway of Tally > Accounting Vouchers > Press F7:Journal
2. Select the required expense ledger in the Debit field and enter the amount
3. In the TDS Nature of Payments Details screen, press Enter to accept the Nature of Payment and
the Assessable Value
4. Select the party ledger in the Credit field and press Enter, the TDS Details screen appears,
5. In TDS Details screen, enter the following details:
 Select New Ref in Type of Ref field
 In the Name field, accept the default TDS reference number
 Select the required Nature of Payment and the required TDS ledger
 Set Deduct Now to No (in order to deduct the TDS later)
 The Payable Amount field displays the amount payable to the party
Figure 12. TDS Details screen
13
 Press Enter to accept the TDS details screen

6. The Payable Amount calculated in the TDS Details screen is defaulted in the party’s Amount
(Credit) field
7. Press Enter to view Bill–wise Details screen
8. In Bill–wise Details screen,
 In the Name field enter the bill name
The Bill-wise Details screen is as shown:
Figure 13. Bill-wise Detail screen
 Press Enter to accept Bill-wise Details screen
14
9. Press Enter to accept
Illustration 4:
On 23-04-2011, Universal Enterprises paid Rs. 55,000/- to Southern Advertisement Agency towards
Advertisement Expenses (vide Ch. No. 145687).
Setup :
 In F12: Configure, set Use Single Entry mode for Pymt/Rcpt/Contra to No
Create Payment Voucher

Go to Gateway of Tally > Accounting Vouchers > Press F5: Payment
2. In Debit field, select the required expense ledger from the List of Ledger Accounts
3. Enter the Amount and press Enter to view Bill-wise Details screen
4. In Bill-wise Details screen
 Select Agst Ref in the Type of Ref
15
 Select the required Pending Bills in Name field, Amount is defaulted automatically
The Bill-wise details screen is as shown:
5. In Credit field, select the bank account ledger from the List of Ledger Accounts, the amount is
defaulted automatically
6. In the Banking Allocations screen, enter the Favouring Name, Instrument No., Instrument Date
and Crossing details
The Payment Voucher is displayed as shown:
16
Figure 16. Completed Payment Voucher
Illustration 5:
On 23-04-2011, Universal Enterprises paid Rs. 43,200- (vide Ch. No. 145690) to Prithvi Consulting
Services towards final settlement of Bill No. PCS/001/11-12 dt. 10/04/2011.

2. In Debit field, select the required party ledger from the List of Ledger Accounts
3. Enter the amount and press enter to view Bill-wise Details screen
4. In Bill-wise Details screen,
 Select the required Pending Bills in Name field, Amount is defaulted automatically
17
The Bill-wise Details screen is displayed as shown:
 Press Enter to accept the screen

5. In Credit field, select the required bank account ledger from the List of Ledger Accounts, amount
is defaulted automatically
18
Figure 18. Payment Voucher
TDS Deduction at Lower Rate

The Income Tax Act, as per section 197 allows the benefit of deduction of tax at source at a lower rate
on filing of declaration in the prescribed form, with the payer.
Illustration 6:
On 25-04-2011, Universal Enterprises received a bill for Rs. 45,000/- from Cegon Enterprises
towards Commission Charges. Cegon Enterprises has been granted a lower deduction certificate for
deduction of Tax @ 5% on commission.
i. Create Party ledger (Cegon Enterprises)

Go to Gateway of Tally > Accounts Info. > Ledgers > Create
 In F12: Configure (Ledger Configuration), set Allow Advanced entries in TDS Master to
Yes
 Enter the Name of the Party Ledger
19
 Select Sundry Creditors from the List of Groups in the Under field
 Set Maintain balances bill-by-bill to Yes
 Enter the Default Credit Period, if required
 Set Is TDS Deductable to Yes
 In the Deductee Type field, select Partnership Firm from the List of Deductee Type
 Set Use Advanced TDS Entries to Yes
 In Advanced TDS Entries screen, set the option Zero / Lower Deduction to Yes
 In Zero / Lower Deduction Details sub-screen
 Select Nature of payment
 Select Section Number
 Enter the Certificate No./ Date, Applicable From date and Applicable To date
 Enter the alloted TDS rate
 Enter the Surcharge, Ed Cess and Sec Ed Cess, if applicable (Tally.ERP 9 defaults the rate
as Zero)
Figure 19. Zero / Lower Deduction Details
 Press Enter to accept the sub-screen

 Press Enter to accept the Advanced TDS Entries screen
 Type the Mailing Details and Tax information of the party if required
 Press Enter to accept
ii. Create Journal Voucher

3. Enter the amount
20
Value of the expenditure
5. Press Enter to accept the Nature of Payment
6. The amount in the Assessable Value is defaulted
8. In the TDS Details screen, provide the following details
 Select New Ref in the Type of Ref. field
 Select the required Nature of Payment and press Enter to accept 197 in Is Zero / Lower Rate
field
 Select the required TDS ledger from the list of TDS Duty Ledgers
 The Assessable Amount field is defaulted with the amount specified against the expenses
ledger
 Set Yes in Deduct Now field and the tax amount deducted at source is displayed in the TDS
Amount field
 The amount (after deducting TDS) payable to the party is displayed in the Payable Amount
field. The TDS Details screen is displayed as shown:
Figure 20. TDS details screen
21
9. Press Enter to accept TDS Details screen

10.The Payable Amount calculated in the TDS Details screen will be defaulted in the party’s Amount
(Credit) field
11.Press Enter to view Bill–wise Details screen
12.In Bill–wise Details screen,
 Press Enter, select New Ref as Type of Ref and Enter Bill name for TDS
 Press Enter to accept the Amount allocation
Figure 21. Bill–wise Details screen
13.Select the required TDS ledger in the Credit field and press Enter to accept the amount
14.Enter the details of the transaction in the narration field
22
15.Press Enter to accept.
TDS Deduction at Zero Rate

The Income Tax Act, as per section 197A allows the benefit of non-deduction of tax at source to an
individual payee on filing of declaration in the prescribed form with the payer.
Illustration 7:
On 25-04-2011, Universal Enterprises received a bill for Rs. 15,000/- from Edens Advisory Services
towards Fees for Professional Services. Edens Advisory Services has been granted a No Deduction
Certificate.
i. Create the Party Ledger (edens Advisory Services)

Go to Gateway of Tally > Accounts Info. > Ledgers > Create (Under Single Ledger)
 In F12: Configure (Ledger Configuration), ensure that Allow Advanced entries in TDS
Master is set to Yes
23
 Enter the Name of the Party Ledger

 Select Sundry Creditors from the List of Groups in the Under field
 Set Maintain balances bill-by-bill to Yes
 Enter the Default Credit Period, if required
 Set Is TDS Deductable to Yes
 In the Deductee Type field, select Association of Persons from the List of Deductee Type
 Set Use Advanced TDS Entries to Yes
 In Advanced TDS Entries screen, set the option Zero / Lower Deduction to Yes
 In Zero / Lower Deduction Details screen
 Select Nature of payment as Fees for Professional Or Technical Services
 Select Section Number as 197A
 Enter the Certificate No./ Date
 Enter the Applicable From date
 Enter the Applicable To date
 The TDS rate will be defaulted to 0%
Figure 23. Zero / Lower Deduction Details
Press Enter to accept the Advanced TDS Entries screen

 
 Type the Mailing Details like Address, State and PIN Code
 In Tax information field enter the PAN/IT No and accept the screen
ii. Create Journal Voucher

24
3. Enter the amount

Value of the expenditure.
 Press Enter to accept Fees for Professional Or Technical Services as Nature of Payment
 The amount in the Assessable Value is defaulted
6. In the TDS Details screen,
7. In Is Zero/ Lower Rate field, select section 197A for zero deduction
Figure 24. TDS Details screen
8. Enter the details of the transaction in the narration field
25
9. Press Enter to accept.
Illustration 8:
On 30-04-2011, Universal Enterprises deducts TDS at the following rates on Commission payable to
Citi Enterprises (vide B.No. CE/001 dt. 20/04/2011). The applicable Income tax rates for Commis-
sion is TDS @ 10%.

2. Press Alt +S or click on S: TDS Deduction button, to view TDS Deductions screen
3. In TDS Deduction screen,
 In Till Date field, enter the date till which the TDS deduction is to be made
 Select the required party ledger from the List of Ledger(s) in the Party field
 Select the required expense ledger from the List of TDS Nature of Payments
26
Figure 26. TDS Deduction
 Press Enter to accept the TDS Deductions sub-screen
4. The TDS amount with the respective bill details will be prefilled automatically as shown:
Figure 27. Journal Voucher with Auto filled TDS values
5. In the Bill-wise Details screen,

 Select CE/001 dated 20-Apr-2011 in the Name field and press Enter
 The amount is defaulted
27
The completed Bill-wise Details is displayed as shown:

6. Enter the details of the transaction in the Narration field, if required
28
Deducting TDS on Payments

Illustration 9:
On 30-04-2011, Universal Enterprises paid Rs. 2,00,000/- to Mr. Vijay Kumar (Landlord) towards
Rent for the month of April 2011 (vide Ch. No. 145787). The applicable Income tax rates for
payment of ‘Rent’ to ‘Individual / HUF - Resident’ Deductee Type is TDS - 10%
Setup :
 Create the ledger Vijay Kumar under Sundry Creditors with Deductee Type as Individual /
HUF -Resident
 Create the ledger Rent under Indirect Expenses with
 Default Nature of Payment as Rent of Land
 Create the TDS tax ledger TDS on Rent under Duties & Taxes with
 Type of Duty/Tax as TDS and Nature of Pymt as Commission or Brokerage
29

2. In Debit field, select the required ledger from the List of Ledger Accounts
3. Enter the Amount and press Enter to view Bill-wise Details screen
4. In Bill-wise Details screen,
 Select New Ref in the Type of Ref field
 Enter the Bill name
 Press Enter to skip the Due Date, or Credit Days field
 Press Enter to accept the Amount
Figure 30. Bill-wise details Screen
 Press Enter to accept the Bill-wise Details screen

5. In the Credit field, select TDS on Rent from the List of Ledger Accounts and press Enter
6. In the TDS Details screen, provide the following details
 By default, Pymt / 3-1 is prefilled in the Name field
 Select Rent of Land, Building Or Furniture in Nature of Payment field
7. The Assessable Amount field is defaulted and the TDS Amount is calculated automatically based
on the applicable TDS rates
30
Figure 31. TDS Details Screen
 Press Enter to accept the TDS Details screen

8. In Credit field, select the required bank account ledger from the List of Ledger Accounts, the bal-
ance Amount is defaulted automatically
31
Figure 32. Payment Voucher
Payment of TDS
As per Income Tax Act, corporate & non- corporate entities (deductors) making payments to third
parties (deductees) are required to deduct tax at source at the prescribed rates on such payments. The
TDS so deducted should be deposited to the credit of the central government within one week from the
last day of the month in which the deduction is made, into any of the designated branches of banks
authorized to collect taxes on behalf of government accompanied by Income Tax Challan ITNS 281.
Illustration 10:
On 05-05-2011, M/s. National Enterprises paid Rs. 4,800/- to Government towards TDS on Consult-
ing Charges for the month of April 2011.
Setup :
 In F12: Configure (Payment Configuration), set Use Single Entry mode for Pymt/Rcpt/
Contra to Yes
32

2. Press Alt+S or click S: Stat Payment button, to view Statutory Payment screen
3. In the Statutory Payment screen,
 Select TDS from the list in the Type of Duty/Tax field
 Set Yes to Auto Fill Statutory Payment to auto calculate and fill the duty payable to the Gov-
ernment
 Enter the date till which the TDS deductions are to be considered in Deducted Till Date field
 Select 194J in the Section field
 Select the Deductee Status
 Select the required bank account ledger from the List of Ledger Accounts
4. The Statutory Payment screen is displayed as shown:
Figure 33. TDS Statutory Payment
 Press Enter to accept the Statutory Payment screen

5. The bank ledger selected in the Statutory Payment screen is defaulted automatically in the
Account field
33
6. Set Provide Details to Yes, to view the TDS Payment Details

7. In the Payment Details screen
 Enter the periodicity of the payment of TDS amount in the From Date and To Date field
respectively
 Enter the Cheque/DD No details
 Select the Bank in the Name of Bank field, once HDFC Bank is selected, Bank Account num-
ber, Branch Name and BSR Code is pre-filled
 Enter the Branch Account Number
 Enter the Bank Branch name
 Enter the BSR code of the branch
 Enter the Challan No. and Challan Date
Figure 34. Payment Details

8. Accept the default values in the Bank Allocations for: screen
34
The TDS Payment voucher is displayed as shown:
Figure 35. TDS Payment Voucher
Illustration 11:
On 05-05-2011, Universal Enterprises paid Rs. 1,600/- to Government towards TDS on Advertise-
ment Expenses for the month of April 2011.

1. Press F2 and specify the date
3. In Statutory Payment screen,
 Select the Type of Duty/Tax
 Set Yes to Auto Fill Statutory Payment to auto calculate and fill the duty payable to the gov-
ernment
 Select 194C in the Section field
35
 Select the Nature of Payment

 Select the Deductee Status
 Select the required bank account ledger from the List of Ledger Accounts
The Statutory Payment screen is displayed as shown:

4. The Bank Ledger selected in the Statutory Payment screen is defaulted automatically in the
Account field
6. In the Payment Details screen
respectively
 Select the Bank in the Name of Bank field
36
Figure 37. Payment Details Screen
The Payment voucher will appear as shown:
37
Illustration 12:
On 05-05-2011, M/s. National Enterprises paid Rs. 11,500/- to Government towards TDS on Com-
mission for the month of April 2011.
3. In the Statutory Payment Screen,
 Select the Type of Duty/Tax
 Set Yes to Auto Fill Statutory Payment to auto calculate and fill the duty payable to the Gov-
ernment
 Select 194H in the Section field and the required Nature of Payment
 Select the Deductee Status and the required bank account ledger from the List of Ledger
Accounts
The Statutory Payment screen is displayed as shown:
38
4. The Bank Ledger selected in the Statutory Payment screen is defaulted automatically in the
Account field
6. In the Payment Details screen,
respectively
 Select the Bank in the Name of Bank field
Figure 40. Payment Details Screen

The completed Payment voucher will appear as shown:
39
TDS Reports
The following TDS Reports can be generated in Tally.ERP 9:
 TDS Computation Report
 TDS Challan
 TDS Statutory Returns
 Outstandings
 Exception Report
To view the TDS Reports,

Go to Gateway of Tally > Display > Statutory Reports > TDS Reports
40
Figure 42. TDS Reports
Computation
The TDS Computation report displays information about TDS transactions. The TDS Computation
report has 2 broad subdivisions,
 Deduction Details: In this section, the assessable value of Expenses & Advances, TDS
Deducted amount and the Balance Deductable at Normal and Lower Rate is displayed
 Payment Details: In this section, the details of TDS paid during the current and previous month
and the balance payable is displayed
To view TDS Computation report,

Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Computation
41
Figure 43. TDS Computation
TDS Computation Party Wise

 Press Enter on the Expenses and Advances under Deduction details section to drill down to
Party Wise report
42
Figure 44. TDS Computation – Party Wise
You can configure the Party wise report, by pressing F12: Configure
 In F12: Configure,
 Set Show Tax Deducted to Yes
 Show Tax Deductable Break-up to Yes
 Set all other options to No
43
Figure 45. TDS Computation – Party Wise
TDS Computation Payment Wise

The TDS Paid report displays the details of TDS payments made during the selected period.
 Press Enter on Paid under Payment details section to drill down to TDS Paid report
44
Figure 46. TDS Paid Report
TDS Computation Balance Payable

 Press Enter on any particular Balance Payable under Payment details section
The TDS Payable report is displayed as shown:
45
Figure 47. TDS Payable Report
Challan Reconciliation
As per Income Tax Act, the details of payment of Tax Deducted at Source are required to be furnished
in the TDS certificate issued to the deductee. For this purpose, the Challan details containing the infor-
mation in respect of Bank Challan No. & Date, Bank Name, BSR Code etc., are required to be speci-
fied.
Tally.ERP 9 allows the user to enter all the required information as specified by the statutes, by using
the Challan Reconciliation facility.
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Challan Reconciliation
 Press F5: Challan Reconcile
46
The Challan Reconciliation report is displayed as shown:
Figure 48. Challan Reconciliation
 Click on S: Set Challan Details button to fill the challan details

 Press Enter to accept the Challan Details
47
Figure 49. Challan Reconciliation Screen

Return
Corporate & non- corporate entities (deductors) responsible for making payments to third parties
(deductees) and deducting tax at source at the prescribed rates on such payments are required to furnish
TDS returns containing details of deductee(s) and the payment details relating to the deposit of such
tax to Income Tax Department. Tally.ERP 9 allows you to generate and print statutory returns in
physical as well as uploadable formats as prescribed by the government. In Tally.ERP 9, you can
generate the following Quarterly/Annual Returns
 Form 16A
 Form 26Q
 Annexure to 26Q
 Form 27Q
 Annexure to 27Q
 Form 26
 Annexure to 26
 Form 27
 Annexure to 27
48
To generate TDS Return,

Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return
Figure 50. TDS Return
Form 16A
Every person deducting tax at source from payments other than salaries, is required to furnish a certifi-
cate in Form 16A to the person on whose account such tax is paid to the credit of Central Government
within the prescribed time and specifying the amount deducted, the rate at which the tax has been
deducted and any other particulars as may be prescribed.
To print Form 16A,

Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Print Form 16A
 In Name of Ledger screen, select the required party ledger from the List of TDS Parties
 Press Enter, the Printing TDS Form16A screen appears
 In Printing TDS Form 16A screen, enter the details as shown:
49
Figure 51. Printing TDS Form 16A screen
 Press Enter to Print Form 16A
50
Figure 52. Printed Form 16A
Form 26Q
Form 26Q is a quarterly return for deduction of tax in respect of payments made to residents other than
salary. To print Form 26Q,
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Form 26Q
51
 In Printing TDS Form 26 Quarterly, press Backspace and enter the following details
Figure 53. Printing TDS Form 26Q
The printed Form 26Q is displayed as shown:
52
Figure 54. Form 26Q (Page 1)
53
Annexure to Form 26Q

As per Income Act, the annexures in respect of each deductee with breakup of TDS is required to be
furnished along with the Quarterly/Annual Returns. Annexure for each deductee should be generated
in separate page.
To print Annexure to Form 26 Q,

Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Annexure to Form
26Q
 In Printing Form 26Q Annexure, press Backspace and enter the required details
 Press Enter to print Annexure to Form 26 Q
The printed Annexure to Form 26Q appears as shown:
54
Figure 56. Annexure to 26Q (Page 1)
Figure 57. Annexure to 26Q (Page 2)
The subsequent pages will be printed for the next deductee with the TDS breakup details.
Form 27 Q
Form 27Q is a Quarterly return for deduction of tax in respect of payments made to non-residents
other than salary.
To print Form 27Q,

Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Form 27Q
 In Printing TDS Form 27Q screen, press Backspace and enter the required details
55
The printed Form 27Q appears as shown:
56
Annexure to 27Q
As per Income Act, the annexures in respect of each deductee with breakup of TDS is required to be
furnished along with the Quarterly/Annual Returns. Annexure for each deductee should be generated
in separate page.
To Print Annexure to Form 27Q,

27Q
 In Printing TDS Form 27Q Annexure, press Backspace and enter the required details
 Press Enter to print Annexure to Form 27Q
Form 26
Form 26 is an Annual return for deduction of tax in respect of payments made to residents other than
salary.
To print Form 26,
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Form 26
 Press Enter to print Form 26
The printed Form 26 appears as shown:
57
Figure 60. Printed Form 26
Annexure to Form 26
To Print Annexure to Form 26,
26
58
The printed Annexure to Form 26 appears as shown:
Figure 61. Annexure to Form 26
Similarly, the annexure for the subsequent nature of payment will be printed in the next page.
59
Form 27
Form 27 is an annual return for deduction of tax in respect of payments other than salary made to non-
residents.
To print Form 27,
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Form 27
Figure 62. Printed Form 27
60
Annexure to 27
To print Annexure to Form 27,
27
 In Printing TDS Form 27 Annexure, press Backspace and enter the required details
 Press Enter to print
In our examples, we have not considered payments made to non-residents. Hence,

the Form 27Q, Form 27 and Annexure to Form 27Q will appear blank.
eTDS Returns
In Tally.ERP 9, the eReturn menu displays the eTDS Quarterly / Annual Forms, which can be exported
and validated with the File Validation Utility.
To view the E-TDS Forms,

Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > E–Return > E–TDS
Figure 63. E-TDS Forms
61
Form 26Q
Form 26Q is a Quarterly return for deduction of tax in respect of payments made to residents other
than salary. To export Form 26Q
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > E-Return > E-TDS >
Form 26Q
 In Exporting eTDS Forms, press Backspace and enter the following details:
Figure 64. Exporting eTDS Forms
The exported file is placed in the Tally.ERP 9 directory with the file name as specified above.
62
Figure 65. Exported Form 26Q in Tally.ERP 9 Directory
The exported file (Form 26Q) is required to be validated with the File Validation Utility (a freely down-
loadable utility from NSDL website) and after validation, the returns should be submitted to the depart-
ment in CD along with Form 27A in Physical Form.
Print Form 27A

Form 27A is a summary of TDS return which contains control totals of amount paid and income tax
deducted at source. Form 27A is to be filed in physical form with each return i.e., Form 26Q, Form 27
Q, Form 26 and Form 27.
Go to Gateway of Tally > Display >Statutory Reports > TDS Reports > E–Return > Print Form 27A
In the Printing TDS Form 27A screen, enter the required details
63
Figure 66. Printing TDS Form 27A
 Press Enter to Print Form 27A
The printed Form 27A is displayed as shown:
64
Figure 67. Printed Form 27A
Form 27Q
Form 27Q is a Quarterly return for deduction of tax in respect of payments made to non-residents
other than salary.
To export Form 27Q,
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > E–Return > E–TDS > Form
27Q
 In Exporting eTDS Forms screen, press Backspace and enter the required details
65
Figure 68. Exporting eTDS Forms
 Press Enter to export Form 27Q
Similarly, you can export Form 26 and Form 27 in the manner as explained above.
Outstandings
In Tally.ERP 9, you can generate the following TDS outstandings reports :
 TDS Payables
 Ledger-wise TDS Payable
 Nature of Payment
 TDS Not Deducted
TDS payables
The TDS Payables report gives you information on the TDS payable (pending) to Government for a
particular Nature of Payment.
To view TDS Payables report,
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Outstandings > TDS
Payables
66
Figure 69. TDS Payable Report
 Press Alt+F1 or click on F1: Detailed to view in detailed mode

 To print TDS Payables report, press Alt+P from the TDS Payable report screen
The printed TDS Payables report appears as shown:
Figure 70. Print Preview – TDS Payable Report
67
Ledger
TDS Ledger Outstandings report displays ledger wise TDS outstandings. This report can be viewed
for one ledger or for all the ledgers.
To view TDS Ledger report,
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Outstandings > Ledger
Figure 71. Ledger Menu
 Select All Items, to view Ledger Outstandings for all the ledgers
The TDS Ledger Outstandings report appears as shown:
68
Figure 72. TDS Ledger Outstandings – All Items
 Or, select One Item, to view TDS Ledger Outstandings for a particular ledger
 Select the required ledger and press Enter to view TDS Ledger Outstandings report
The TDS Ledger Outstandings report for a single ledger appears as shown:
69
Figure 73. TDS Ledger Outstandings – One Item
Nature of Payment
TDS Nature of Payment Outstanding report displays Nature of Payment-wise TDS outstandings. This
report can be viewed for all the Nature of Payment or for one Nature of Payments.
To view TDS Nature of Payment report,

Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Outstandings > Nature of
Payment
70
Figure 74. Nature of Payment
 Select All Items, to view Nature of Payment Outstandings for all the Nature of Payment
The TDS Nature of Payment Outstandings report is displayed as shown:
Figure 75. TDS Nature of Payment Outstandings – All Item
71
 Or, select One Item, to view TDS Nature of Payment Outstandings for particular Nature of
Payment
 From the List of TDS Nature of Payments, select the required ledger
The TDS Nature of Payment Outstandings report is displayed as shown:
Figure 76. TDS Nature of Payment Outstandings – One Item
TDS Not Deducted

The TDS Not Deducted report displays party wise information on the amount subject to TDS, Tax to
be Deducted on such amount, Tax Deducted till date and Balance to be deducted.
To view the TDS Not Deducted report,

Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Outstandings > TDS Not
Deducted
72
In our case study, the TDS Not Deducted Report will be blank, since TDS is
deducted on all the transactions. Hence, you may press F7 to display all TDS
related transactions.
 Press F7 (Show All) to display all transactions

 Press Alt+F1 or click on F1: Detailed to view in detailed mode
The TDS Deducted Details screen appears as shown:
Figure 77. TDS Not Deducted Report
Exception Reports
In Tally.ERP 9, you can generate various TDS exception reports to help track and rectify any discrep-
ancies in TDS entries. Tally.ERP 9 allows you to generate exception reports to track Migrated
vouchers, Migrated bills, TDS masters with advanced configuration, Migrates TDS vouchers, TDS
masters without PAN details and TDS masters without deductee type.
73
To view TDS Exception Reports,

Go to Gateway of Tally > Display> Statutory Reports > TDS Reports > Exception Reports
Figure 78. Exception Reports
PAN Not Available

The PAN Not Available report displays all the party ledgers for whom the PAN details is not available.
To view the PAN Not Available report,
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Exception Reports > PAN
Not Available
Unknown Deductee Type

The Unknown Deductee Type report displays all the party ledgers for whom the Deductee Type is not
defined.
To view the Unknown Deductee Type report,
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Exception Reports >
Unknown Deductee Type
Migrate Tool
The migrate tool comprises of the following reports:
 Track Migrate Voucher: displays date-wise Migrated and Non-migrated vouchers. Tally.ERP
9 displays the non-migrated vouchers amount in bold for easy identification
 Track Migrate Bills: displays tax bill name wise migrated and non-migrated voucher. In this
report, you can identify migrated / non- migrated vouchers by comparing the previous deduc-
tion amount and new deduction amount and previous payment amount and new payment
amount are same.
 Track Masters: displays TDS Ledger wise Lower Deduction, Zero Deduction and IT Exemp-
tion details
 Re-Migrate: The Re-Migrate option, first un-migrates all the TDS vouchers and then re-
migrates all the vouchers.
74

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Tax Deducted at Source in

© 2012 Tally Solutions Pvt. Ltd. All rights reserved.

Version: Tax Deducted at Source in Tally.ERP 9/eLearning/1.0/June 2012

Tax Deducted at Source in Tally.ERP 9 ...................................................................................... 1

Features of TDS compliant Tally.ERP 9

Configuring TDS in Tally.ERP 9

Enabling TDS in Tally.ERP 9

 Specify the Name of person responsible and his/her designation

 Press Enter to Accept the screen

The Statutory and Taxation screen is as shown:

Figure 1. Statutory and Taxation Features screen

TDS Statutory Masters

TDS Nature of Payments

Figure 2. TDS Nature of Payments

 Select a Nature of Payment from the list and press Enter

Figure 3. TDS Nature of Payments

Figure 4. Deductee Types

 Select a Deductee Type from the list and press Enter

Figure 5. Deductee Types

Booking Expenses and Deducting TDS

 Deductee Type as Company - Resident

 PAN/IT No. as AGBPP8210B

 Create the ledger Consultation Charges under Indirect Expenses with

 Default Nature of Payment as Fees for Professional Or Technical Services

Create Journal Voucher

 Select the required Nature of Payment

The TDS Details screen is displayed as shown:

Figure 6. Completed TDS Details Screen

 Press Enter to accept TDS Details

 In the Name field, enter the bill name

The Bill-wise Details screen appears as shown:

Figure 7. Bill-wise Details

The Journal Voucher is displayed as shown:

Figure 8. Journal Voucher

12.Press Enter to accept

 Deductee Type as Partnership Firm

 PAN/IT No. as AQBGG8570B

 Create the ledger Advertisement Expenses under Indirect Expenses with

 Is TDS Applicable as Yes

Create Purchase Voucher

The TDS Details screen appears as shown:

Figure 9. TDS Details

 Press Enter to accept the TDS Details screen

The Bill-wise Details screen appears as shown:

Figure 10. Bill-wise Details screen

 Press Enter to accept the amount

The Purchase Voucher is displayed as shown:

Figure 11. Purchase Voucher

10.Press Enter to accept

Booking Expenses and Deducting TDS Later

 Deductee Type as Body of Individuals

 PAN/IT No. as ARTBB4560C

 Create the ledger Commission Expenses under Indirect Expenses with

 Default Nature of Payment as Commission or Brokerage

Create Journal Voucher

Figure 12. TDS Details screen

 Press Enter to accept the TDS details screen

The Bill-wise Details screen is as shown:

Figure 13. Bill-wise Detail screen

 Press Enter to accept Bill-wise Details screen

The Journal Voucher is displayed as shown:

Figure 14. Journal Voucher

9. Press Enter to accept