TDS

The concept of TDS was introduced with an aim to collect tax from the very source of income. As per this concept, a person who is liable to make payment of specified nature to any other person shall deduct tax at source and remit the same into the account of central government. The deductee from whose income tax has been deducted at source would be entitled to get credit of the amount so deducted on the basis of FORM 26AS or TDS certificate issued by the deductor.

Enabling TDS in Tally  : Steps : Press the F11 key from keyboard Set the Enable Tax deducted at source option to Yes Press the enter key. The TDS deductor details screen appears Enter the TAN registration number then press enter key Enter the TAN number and press enter key Select the deductor type Company or Individual/HUF Enter the Branch or Division and press enter key Set/Alter details of person responsible : Yes if you want to enter the details of person responsible for deduction of TDS otherwise No Set the Ignore IT exemption limit for TDS deduction to No Set the Activate TDS for stock items to No and press enter key

Ledgers the pertaining to TDS : 1. Creating the TDS nature of payment 2. Tax ledger under the Duties and Taxes 3. Party ledger under Sundry Debtor or Creditor 4. Expense ledger under Direct or Indirect expense group for which a company makes payment 5. Bank ledger for making payment of TDS Creating the TDS nature of payment Steps : Click on create Select TDS nature of payment Enter the name of nature of payment, Section, payment code Then enter rate for Individual/HUF and Rate for other deductee Enter the threshold /exemption limit for nature of payment 

Tax ledger under Duties and taxes Steps : Click on create and Select Ledger Enter the name of tax ledger in the name field Select under group Duties and Taxes Select Type of Duty/Tax as TDS Select nature of payment from the list of TDS nature of payment Press Enter key until the Accept or press Ctrl + A Party ledger under Sundry Debtor/Creditor Steps : Click on create and Select Ledger Enter the name of Sundry creditor or Debtor in the name field Select under group Sundry creditor / Sundry debtor Set is TDS Deductable to Yes and the Select TDS deductee type 

Select nature of payment from the list of TDS nature of payment Set Yes in TDS deduct in same voucher Enter the Mailing details and provide PAN No. Press Enter key until the Accept or press Ctrl + A Expense ledger under Direct / Indirect Expenses Steps : Click on create and Select Ledger Enter the name of Expenses in the name field Select under group Direct or Indirect Expenses Set is TDS Deductable to Applicable Select nature of payment from the list of TDS nature of payment Press Enter key until the Accept or press Ctrl + A

Bank ledger for making payment TDS payment Steps : Click on create and select Ledger Enter the name of Bank in the name field Select under group Bank accounts Enter the Account Number, IFSC Code, Branch name Set cheque book printing to No Enable cheque printing to to No Press Enter key until the Accept or press Ctrl + A Creating TDS vouchers : The voucher used for compute TDS are as follows : 1. Journal Voucher 2. Payment Voucher 

Creating a Journal voucher Steps : Click on Voucher Press F7 for Journal Voucher Select the Expense ledger which you want to debit and fill amount Select the party ledger from the list of ledger Amount is get auto filled after deducting the TDS amount Select TDS tax ledger from the list of ledger account TDS Amount is auto filled Press the enter key until accept or press Ctrl + A from keyboard Creating a Payment voucher Steps : Click on Voucher Press F5 for Payment Voucher Select TDS tax ledger from the list of ledger account Select Agst Ref the journal voucher in name and press enter key

Amount of TDS get auto filled Select the Bank ledger from which you want to make payment Press the enter key until accept or press Ctrl + A from keyboard TDS Report Tally prime provide the facility to generate various TDS report – Challan Reconciliation, Form 26Q, Form 27Q, TDS outstanding and Ledger without PAN report for period monthly, quarterly or annually. Steps : At first go to gateway of Tally Select Display more reports and press enter key Select TDS report under Statutory head Challan Reconciliation, Form 26Q, Form 27Q, TDS outstanding and Ledger without PAN appear on screen Select the report which you want view and press enter key

Challan Reconciliation It is required to reconcile the payment made to the bank for TDS accounts. Steps : Select Challan Reconciliation and Press Alt + R for reconciliation And Fill the details as required 

Form 26Q The Form 26Q report shows the quarterly return for TDS in respect of payment made to company resident other than Salary Form 27Q The Form 27Q report shows the quarterly return for TDS in respect of payment made to company non-resident other than salary. TDS Outstanding TDS outstanding report is used to view all the pending TDS payment. This report shows the pending details of the TDS payment either party-wise or based on resident/non resident status. Ledger without PAN The ledger without PAN report is used to view all the ledger of the parties who do not specify their PAN number and are responsible for TDS deduction. This report also gives the information about the deductee types, Contact person and contact number for the party ledger. 

Examples for Making TDS entries :

Section Nature of Payment Threshold Limit Rate of TDS 193 Interest on Securities Rs 10,000 10% 194A Interest other than Securites Rs 40,000 10% 194B Winning from Lottery Rs 10,000 30% 194BB Winning from Horse Race Rs 10,000 30% 194C Payment to Contractors Rs 30,000 in case of single sum credited Rs 1,00,000 during the FY aggregate of sum aid or credited 1% in case of Individual/HUF 2% in case of other than Individual/HUF 194D Insurance Commission Rs 15,000 5% 194H Commission or Borkerage Rs 15,000 5% 194 I Rent Rs 2,40,000 2% for Plant & Machinery 10% for Land & Building or Furniture & Fitting 194IB Payment of Rent by Individual/HUF Rs 50,000 5% 

194J Payment for Professional or Technical Services Rs 30,000 10% 194N Cash Withdrawals Rs 1,00,00,000 2% 194Q Purchase of Goods Rs 50,00,000 0.1% Bank Name : 1. HDFC Bank 2. SBI Bank 3. PNB Bank 4. UCO Bank 5. Union Bank of India 6. Bank of Baroda 7. Yes Bank 8. Kotak Mahindra Bank 9. Dakshin Bihar Gramin Bank 10. Standard Chartered Bank 11. ICICI Bank Sundry Creditors / Debtor : 1. shubham 2. qumar alam 3. vikash 4. yash5. gagan 6. sapna 7. Kriti 8. prity 9.santosh 10. agan 11. faraha -------------x-----------