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TCS IN TALLY.ERP9

TCS Changes in Budget 2020

Finance Bill 2020 has amended Tax collection at Source (TCS) provisions in
order to widen and deepen its tax base by including remittance under
liberalized remittance scheme, sale of overseas tour packages and sale of
goods. This change shall come in force from 1st October 2020. Under this
new changes TCS is required to be collected at the time of receipt OR
debiting the amount whichever is earlier.

Sale of Any Goods

Every seller, whose total sales, gross receipts or turnover from the business
carried on by him exceed Rs. 10 Crores during the FY 2019-20 & onwards,
and if sales to buyer is exceeding Rs 50 lakhs during the FY 2020-21 &
onwards, then seller has to collect TCS tax from such buyer on the value
exceeding the threshold limit.

Note: No such TCS is to be collected, if the seller is liable to collect TCS under
other provision of section 206C such as Section 206C (1), 206C (1F) and
206C (1G) or the buyer is liable to deduct TDS under any provision of the
Act and has deducted such amount or export outside India.

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The table below will give you all the information related to TCS on Sale of
Any Goods.

Name Sale of Any Goods

Section
206C
Code

Yet to be provided by the department

Payment
Note: As the Payment Code is not yet notified by the
Code
department this field will be left blank and the same will
not be printed on ITNS Challan 281.

With PAN/Aadhaar No PAN/Aadhaar

0.075% 1%

Rate of Note: As per Finance Bill 2020, the TCS rate for this category
Tax with PAN is 0.1% and No PAN will be 1%. Due to COVID
19 outbreak, department has reduced the rate by 25% for
PAN holders. Therefore, PAN rate is reduced to 0.075%
and No PAN remains as 1%.

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Threshold
Rs. 50,00,000.00
Limit

Effective
01-10-2020
From

Note: Standardized terms with explanation

♦ Buyer: A person who purchases any goods
♦ Seller: Every seller, whose total sales, gross receipts or turnover from the
business carried on by him exceed Rs. 10 Crores during the FY 2019-20 &
onwards.

In Tally.ERP 9, if you mention threshold limit in TCS category master then on

crossing the set limit tax is computed from Re. 1. But, for this category tax
should be computed on excess value (over and above threshold limit). Hence,
we need to follow below steps:

Create TCS Category Master

Create new TCS Nature of Goods without mentioning threshold limit as

shown below:

5 Go to Gateway of Tally > Accounts Info. > Statutory Info. > TCS
Nature of Goods > Create.

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Record Sales Invoice for the Sale of Goods

You have to manually keep track of sales made to each party in order to
apply TCS when the threshold limit is crossed. You have to select TCS
category in the transaction to charge tax. However, when the threshold limit
is not crossed you can select Not Applicable as TCS category while recording
the transaction.

For example: Recording first TCS Sales/Receipt transaction for Rs 48,00,000.

Since the threshold limit of Rs 50,00,000 is not crossed, you have to manually
keep track of amount received and select Nature of Goods as Not
Applicable in the TCS Collection Allocations screen of the sales invoice.

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To record a TCS sales with amount received below the threshold limit:

1. Go to Gateway of Tally > Accounting Vouchers > F8: Sales.

2. Click F12: Configure and enable the option Allow modification of Tax
Details for TCS? to be able to manually select the TCS category.

3. Select the ledger of the party in the Party A/c name field.

4. Under Name of Item, select the item(s) sold, enter the quantity and
rate.

5. Press Enter to display Accounting Details screen.

6. Select the TCS sales ledger created for sale of any goods.

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7. Press Enter to display the TCS Collection Allocations screen.

8. Under Nature of Goods, select Not applicable since the amount is

under threshold limit.

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9. Press Enter to return to voucher screen and display the voucher save options.

10. Press O to save the transaction with overridden details.

When the same party makes further payment in the financial year which
makes the total amount for sale of goods exceed the threshold limit you have
to charge TCS on the excess amount by selecting appropriate TCS category in
the transaction.

Record the second sales transaction for the same party and TCS category for
Rs 5,00,000 as below:

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1. Go to Gateway of Tally > Accounting Vouchers > F8: Sales.

2. Select the ledger of the party in the Party A/c name field.

3. Under Name of Item, select the item(s) sold, enter the quantity and
rate.

4. Press Enter to display Accounting Details screen.

5. Select the TCS sales ledger for sale of any goods.

6. Press Enter to display the TCS Collection Allocations screen.

7. Under Nature of Goods, select the TCS category and enter the value of
amount received that is over the threshold limit under Assessable Value.

8. Press Enter to return to voucher screen.

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9. Select TCS duty ledger. Tax is automatically computed. Press Enter to
display the voucher save options.

10. Press O to save the transaction with overridden details.

11. Press Page Up key to view the saved voucher.

12. Press Alt+P (P:Print) to print the invoice.

13. Enable the option Print TCS details? in the Print Configurations. The
Sales Invoice will display the TCS details as shown below:

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Record TCS Sales using Receipt Voucher

You can record TCS sales transaction using a receipt voucher instead of sales.

1. Go to Gateway of Tally > Accounting Vouchers > F6: Receipt.

2. Select the bank account into which the sales amount was received in
the Account field.

3. Under Particulars, select the TCS sales ledger.

4. Specify the amount and press Enter. The amount is under the threshold
limit.

The TCS Collection Allocations screen is displayed.

5. Under Nature of Goods, select Not applicable since the amount is

under threshold limit.

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6. Press Enter to return to voucher screen and display voucher save

options.

7. Press O to save the transaction with overridden details.

When the same party makes further transactions in the financial year which
makes the total amount for sale of goods exceed the threshold limit, you
have to charge TCS for excess amount by selecting the appropriate TCS
category in the transaction.

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Record the second receipt voucher for the same party and TCS category for
Rs 5,00,000 as below:

1. Go to Gateway of Tally > Accounting Vouchers > F6: Receipt.

2. Select the bank account into which the amount was received in
the Account field.

3. Under Particulars, select the TCS sales ledger.

4. Specify the amount and press Enter.

The TCS Collection Allocations screen is displayed.

5. Under Nature of Goods, select the TCS category and enter the value of
amount received that is over the threshold limit under Assessable Value.

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6. Press Enter to return to voucher screen.

7. Select TCS duty ledger and press Enter to display the Party
Details screen.

8. Enter the Party Name, Collectee Type, and PAN details.

Tax rate is applied based on the availability of PAN.

9. Press Enter to display voucher save options.

10. Press O save the voucher with overridden details.

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11. Press Page Up key to view the saved voucher.

12. Press Alt+P (P:Print) to print the invoice. The receipt voucher will
display the TCS details as shown below:

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TCS Duty Payment

The TCS duty payment to be made to department by on or before 7th of

next month. You can record TCS duty payment transaction and see its effect
in ITNS Challan 281 print.

Impact in Form 27EQ Report

The transactions where the amount does not cross the threshold and marked
as Not applicable in TCS Collection Allocations are treated as Excluded
Transactions in returns. The transaction tagged with TCS category are treated
as Included Transactions in returns.

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Record Subsequent Sales to Party after Exceeding Threshold Value

Once the amount for sale of goods to a party exceeds the threshold limit the
entire sale value of all subsequent sales to the party in the same year is
taxable.

1. Go to Gateway of Tally > Accounting Vouchers > F8: Sales.

2. Select the ledger of the party in the Party A/c name field.

3. Under Name of Item, select the item(s) sold, enter the quantity and
rate.

4. Press Enter to display Accounting Details screen.

5. Select the TCS sales ledger for sale of any goods.

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6. Press Enter to display the TCS Collection Allocations screen.

7. Under Nature of Goods, select the TCS category. The entire sales value
is pre-filled in Assessable Value field retain the amount since TCS is
applicable on the entire amount.

8. Press Enter to return to voucher screen.

9. Select TCS duty ledger and press Enter. TCS is calculated for the
Assessable Value based on availability of PAN.

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10. Press Enter to display the voucher save options.

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11. Press Enter or Y to save the transaction.

Impact in Form 27EQ Report

The transaction tagged with TCS category are treated as Included

Transactions in returns. The Assessable Value and Tax Collected is displayed
under Particulars.

Record TCS Sales without Booking Tax

In a scenario you sell goods worth Rs 2 lakhs to one of your regular

customers and record TCS sales transaction without collecting TCS, only to
later realise that the party's sales turn over during the financial year has
crossed Rs 50 lakhs and you had to collect TCS. You can collect TCS duty by
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raising debit note transaction. Let us now see the book entries to handle this
scenario.

1. Go to Gateway of Tally > Accounting Vouchers > F8: Sales.

2. Select the ledger of the party in the Party A/c name field.

3. Under Name of Item, select the item(s) sold, enter the quantity and
rate.

4. Press Enter to display Accounting Details screen.

5. Select the TCS sales ledger for sale of any goods.

6. Press Enter to display the TCS Collection Allocations screen.

7. Under Nature of Goods, select the TCS category. The entire sales value
is pre-filled in Assessable Value field retain the amount since TCS is
applicable on the entire amount.

8. Press Enter to return to voucher screen and display the voucher save
options.

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9. Press Enter or Y to save the transaction.

Record Debit Note to Book TCS

1. Go to Gateway of Tally > Accounting Vouchers > Ctrl+F9: Debit

Note.

2. Debit the ledger of the party and enter the TCS amount in
the Debit column.

3. Credit the TCS duty ledger, Credit amount will appear automatically.

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4. Press Enter or Y to save the transaction.

Impact in Form 27EQ Report

The debit note is displayed under Uncertain Transactions in TCS Form 27EQ
Report

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1. Drill down from Uncertain Transactions to displays debit note under

the category TCS collected but not linked with sales voucher.

2. Further drill down to Collection Voucher screen to display all TCS

collection transactions made but not linked to booking.

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3. Drill again to Booking Voucher screen to view sales transactions that

do have bookings.

4. Click F3: Auto Fill, F4: Full or F5: Partial to link the amount
automatically link, fully link or partially link.

5. Click Save to confirm the linking.

Once the linking is confirmed, the debit note recorded for collection of
tax is considered as included and value is added to Tax Collected.

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