Creating Tax Ledger

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:

Gateway of Tally > Accounts Info > Ledgers > Create

Name

Enter the name of the Tax Ledger

Under

Select the group as Duties and Taxes from the list. On the selection of group Duties and Taxes, you will get the option to select type of Duty/Tax.

Type of Duty/Tax

Select TDS tax type from the list

Nature of Payment

Select the appropriate TDS Nature of Payment as statutorily applicable, given/ desired by the Govt. e.g. Fees for Professional Or Technical Services. By default, Tally provides you with a List of TDS Nature of Payment. You need to select the appropriate TDS Nature of Payment from the list.

 

Similarly, you can create ledgers for TDS on Rent and TDS on Advertising.

Note:
• Nature of Payment - You will find different categories that come under the Tax Deduction. Select the relevant TDS Nature of Payment from the List of TDS Nature of Payment that applies to your company.

Ignore TDS Exemption Limit

If the total transaction limit exceeds the actual limit you need to set the Ignore TDS Exemption Limit field to Yes then the tax is not calculated up to exemption.

 

Accept the Ledger creation screen.