TDS in Tally.ERP9 : TDS in Tally.ERP9 TAX DEDUCTION AT SOURCE
in TALLY.ERP9 Lesson 1:Enabling TDS in Tally.ERP : Lesson 1:Enabling TDS in Tally.ERP Ledger Created… : Ledger Created… Expenditure Ledger – Advertisement Expenses
TDS Ledger – TDS on Advertisement
Expenditure Ledger – Commission Expenses
TDS Ledger – TDS on Commission
Party Ledger – Phoenix Agencies
Bank Account – Canara Bank Transactions… : Transactions… Example: ABC Company received a bill from Phoenix Agencies for Rs. 5,00,000 towards Advertising
Expenditure is Accounted & TDS is deducted for the full amount in the same entry. Slide 31: In the event, where a part of the expenditure is not subject to TDS and the balance amount is subject to TDS, it is crucial to determine the accurate value of expenses for computation of TDS.
Tally.ERP provides the flexibility to enter information in the same voucher. Consider the following scenario to illustrate the Expenses partly subject to TDS. Transactions… : Transactions… Example:
ABC Company received a bill from Phoenix Agencies for Rs. 1,12,360 out of Which Rs. 1,00,000
is towards the Advertising Services provided.
In the above transaction Bill amount includes other expenses of Rs. 12,360 on which TDS is not
Let us understand how to configure Tally.ERP to compute tax only on the Assessable Value (1,00,000).
Expenditure is Partly Subject to Tax Accounting of Expenses and Deducting TDS Later : Accounting of Expenses and Deducting TDS Later It is always expected that, the deductor should deduct the tax in the same invoice in which the expenses are accounted.
But in some cases, deductor may follow the procedure of accounting only expenses on the receipt of bills and later, deduct applicable tax on all such accounted expenses in one invoice. Accounting of Expenses and Deducting TDS Later : Accounting of Expenses and Deducting TDS Later Example No. 3:
ABC Company received TWO bills for Rs. 1,50,000(Bill No: 850 dated 10-4-2008) and Rs.1,25,000 (Bill No: 881 dated 14-04-2008) from Pheonix Agencies towards Advertising Services provided.
In this example expenses are accounted first and later tax is deducted against such expenses. Slide 80: Accounting the second Bill… Accounting Multiple Expenses and Deducting TDS Later : Accounting Multiple Expenses and Deducting TDS Later Slide 118: The TDS transaction in a purchase voucher can be entered for multiple expenses (in the same voucher) and deduct TDS later.
ABC Company received a Bill (No.962) from phoenix agencies towards
Commission Charges - Rs. 20,000
Advertising Expenses - Rs. 10,000 Slide 154: Accounting Advance Payments Slide 171: Adjusting against the advance Slide 205: TDS on Expenses @ Lower Rate Slide 206: Assessing Officer shall issue a certificate for deduction of Tax at Lower rate than the relevant rate specified under the section, Where the assessing officer is satisfied that the total income of the recipient (Assessee) justifies the deduction of income tax at any lower rates than the rate specified under the sections specified under the act and has received an application in Form 13 from the assessee under sub-section (1) of section 197. Slide 207: The certificate granted shall be valid for the assessment year specified and is valid only for the person named therein. Slide 208: In Tally.ERP, the user can record and compute TDS on transactions, on which lower rate of deduction is applicable.
Example: ABC Company received a Bill from ACE Computers for Rs.80,000 towards commission charges. ACE Computers has a certificate for deduction of Income tax at Lower rate @ 5%, on Commission. TDS on Expenses @ Zero Rate : TDS on Expenses @ Zero Rate A Deductee (other than Company or Firm) can submit a declaration in Form 15G under subsection (1) of section 197A, for TDS deduction at Zero Rate. Declarations can be given only by those deductees whose income is below the taxable limit and the income falls under section 193, 194, 194A, 194EE and 194K.
The certificate granted shall be valid for the assessment year specified and is valid only for the person named therein.
Example: ABC Company received a Bill from Gokul Co-operative Building Society for Rs.10,00,000 towards Rent on Building and Furniture. Gokul Co-operative Building Society has a certificate for non-deduction (zero rate) of Income tax on Rent. Surcharge Calculation on Prior Period Expenses : Surcharge Calculation on Prior Period Expenses As per Income Tax Act, Surcharge on TDS is applicable for the payment(s) exceeding Rs.10 lakhs (for Individual, HUF, BOI and Association of Persons) and Rs. 1 Crore (for Companies, Artificial Judicial Person and Partnership Firm). However it is not applicable deductee Types such as Co- Operative Society and Local Authority. Slide 278: In TDS, when the payment exceeds the Surcharge exemption Limit, surcharge is applicable on the entire amount right from the first transaction.
However, the transactions recorded until the deductee reached the surcharge exemption limit were not charged to surcharge, in such cases surcharge is to be calculated on the entire amount. Slide 279: Tally.ERP automatically calculates the surcharge on the prior transactions.
ABC Company received a Bill from Pheonix Agencies for Rs. 3,00,000 towards the Advertisement services rendered Slide 294: TDS amount in the above screen includes surcharge on the payment, as the total payment to the party exceeds the Surcharge exemption limit of Rs.10,00,000 [Prior transaction Values 500000+112360+150000+ 125000+ 30000+10000+10000)+Current Transaction value (300000)].
(The Deductee Type identified for Pheonix Agencies is Association of Persons, where the Surcharge exception limit for Association of Persons is Rs.10,00,000)
Here Surcharge is calculated only on Rs. 3,00,000 (present Bill amount).
Surcharge on prior period expenses are accounted separately by recording a Journal voucher Slide 295: Accounting Surcharge on Prior Period Expenses
In Tally.ERP, Surcharge on prior period expenses can be accounted by passing an adjustment entry in Journal Voucher.
Enter <10-05-2008> in the Till Date field.
In Party field Tally.ERP displays the List of Party ledgers against whom the Surcharge deduction is due, select the appropriate party.
In Nature of payment field, Tally.ERP displays all the party related nature of payments under which Surcharge deduction is pending.
Select All Items from the List of Nature of Payments. Surcharge Calculation on Expenses : Surcharge Calculation on Expenses As per Income Tax Act, Surcharge on TDS is applicable for the payment(s) exceeding Rs.10 lakhs
(for Individual, HUF and Association of Persons) and Rs 1 Crore (for Companies, Artificial Judicial
Person and Partnership Firm). However it is not applicable for Deductee Types such as Co-
Operative Society and Local Authority. Slide 297: In TDS, when the payment exceeds the Surcharge exemption Limit, Surcharge is applicable on the entire amount right from the first transaction and such past transactions will have to be shown
in the e-TDS statements.
In this scenario it is always suggested that a realistic estimation of total amount, to be made right in the beginning and deductor should deduct TDS without considering the Surcharge Exemption Limit. Slide 298: Example: ABC Company received a Bill (vide No. 555) from Mark IT Solutions for Rs. 2,00,000 towards the commission charges. Reversal of Expenses with TDS (Debit Note) : Reversal of Expenses with TDS (Debit Note) In case of Cancellation of transaction(s), the expenses and TDS deducted needs to be Reversed/ cancelled in the books of accounts.
In Tally.ERP, such reversal of expenses and TDS is possible only when the cancellation of transaction is made before the payment of TDS to the Government.
In Tally.ERP, reversal of expenses and TDS are accounted using Debit Note. Slide 320: Example: ABC Company cancelled the transaction dated 15th May, 2008 for Rs. 2,00,000 (bill- 570) as Mark IT Solutions failed to reach the sales target set by the company. Accounting Changes in TDS Percentage : Accounting Changes in TDS Percentage Whenever a Cess is made applicable or Tax rate is changed, the same is effected through finance Bill.
Finance Bill will be presented on 28th February and is generally passed and becomes Act around mid May. Slide 340: Example: In the Finance Bill, rate of income tax on Fees for Professional and Technical services is changed from 5% to 10%.
Before the finance bill is passed, the deductor accounted the transactions in April month against professional fees and deducted tax at 5%.
Then the finance bill is passed in the month of may and the effective date for the change in rate of income tax on Fees for Professional and Technical services is mentioned as 1st April. Slide 341: In this case deductor has deducted the tax at a lower rate on the transactions booked before
the Finance act and is expected to deduct the difference.
Changes in the TDS Percentages are updated in the Deductee Type statutory masters.
In Tally.ERP such difference Income Tax amount can be deducted for all the
transactions booked (at lower rate) before the change in the TDS rates by recording
an adjustment entry in Journal Voucher (using TDS Deduction) Payment of TDS using TDS Helper : Payment of TDS using TDS Helper All the Tax deducted during a month is to be paid to the credit of Government on or before 7th of the next month.
In case 7th of the month happens to be a Sunday or a bank holiday payment can be made on the next working day TDS amount shall be paid to the government account through any designated branches of the authorised banks, along with Income Tax Challan No.281.
Example: ABC Company paid TDS (under section 194C) of Rs.9342.10 through cheque (no. 056330) for the month of April, 2008. Reports - TDS Outstandings Reports : Reports - TDS Outstandings Reports Gateway of Tally > Statements of Accounts > TDS Outstandings
Nature of Payment TDS Reports : TDS Reports Go to Gateway of Tally > Statutory Reports > TDS Reports > Return
Print Form 16A
Annexure to 26Q
Annexure to 27Q
Annexure to 26
Annexure to 27 TDS Exception Reports : TDS Exception Reports Go to Gateway of Tally > Exception Reports >TDS Reports
Track Migrate Voucher
Track Migrate Bills
TDS Not Deducted
PAN Not Available
Unknown Deductee Type Thank You : Thank You THANK YOU!