Illustrating a case where Is Lower/No Deduction is applicable

Creating a TDS Party Ledger

1. Go to Gateway of Tally > Accounts Info > Ledgers > Create

2. In the Ledger Creation screen, enter the name of the party in the Name field

3. In the Under field, select Sundry Creditors/Sundry Debtors, Loans (liability) and all ledgers belonging to group under Current Assets except Bank and Cash in bank.

4. By default, Maintain balances bill-by-bill? is set to Yes.

    

To create Party Ledgers for Sundry Debtors/ Sundry Creditors

1. Go to Gateway of Tally > Accounts Info > Ledgers > Create

2. In the Ledger Creation screen, enter the name of the Party/Supplier, who provides services to you.

3. In the Under field, select Sundry Debtors/Sundry Creditors option from the List of Groups

4. If required, set Maintain balances bill-by-bill? to Yes.

    

The Tax ledgers have to be created under the group Duties and Taxes. The group 'Duties and Taxes' is automatically used for calculation of tax. This Ledger holds the entire automatic calculation for TDS tax deductions at the voucher entry level.

It is internally enabled to calculate the Tax.

The option to specify the Tax Type is available only for ledgers under the group 'Duties and Taxes'.

The Tax ledger master screen can be reached by following the menu path:

The information required for TDS in the creation of ledgers depends on the features opted by you in the F11: Features screen. If you set Enable TDS [F11: Features] to No then you would not find any TDS related information in the Creation of Ledger.

Hence, make sure Enable TDS option in F11: Features > Statutory & Taxation is set to Yes.

Company Creation means providing basic information about the company whose books of accounts you want to maintain in Tally.

Statutory Compliance for

Select the Country from the list of countries.

State

Select the appropriate State from the list.

PIN Code

Enter the Postal Index Number, which is a numerical of six digits

The State and Pin Code fields are added to capture the state details.

Example 1: Indirect Expenses (Fees for Professional or Technical Services (Section 194J)

Manohar is a technical consultant for automobiles. He inspects used cars and prepares a report. Manohar (seller of the service) receives Rs.500 for inspection of one car. He inspects five cars in January 2005. So he has to receive Rs.2500 as service charges. Company 'A' pays him Rs.2250 towards service charges and pays Rs.250 to any Bank or IT counter towards TDS.

The Buyer (Deductors) has to furnish the TDS returns in electronic form and Form 27A in physical form along with the e-TDS return CD/floppy.

Form 27A must be furnished separately for each return (Form 24, 26 or 27).

NSDL has developed a utility called File Validation Utility (FVU) to verify whether the e-TDS return file prepared by the Buyer (deductors) conforms to the prescribed format

A seller (deductee) provides services to the buyer (Deductor). The buyer deducts the amount towards TDS prior to the services or the bills received. The buyer issues Form No.16A to the deductee and deposits the deducted amount to the Authorised Bank (Treasury). The buyer files annual returns electronically to the Income Tax department.

Tax Deducted at Source (TDS) is one of the modes of collecting income tax. The buyer (deductor) deducts the tax from the payment made to the seller (deductee) and remits the tax to the Income Tax Department within the stipulated time.

The buyers (Corporate and Non-Corporate) make payments (such as Salary, Rent, Interest on securities, Dividends, Insurance Commission, Professional Fees, Commission on Brokerage, Commission on Lottery Tickets, etc) to the sellers (Services) and deduct the requisite amount from such payments towards tax.

All reports and documents generated in Tally can be published on your website. Tally can create reports in HTML format and upload the same directly to your website. For example, use this feature to inform your customers about the new price-range and stocks available for sale on your website. Tally uses the highest standard of data encryption methods to ensure security of data.