Tally (TDS)

TDS IN TALLY ERP 9

INTRODUCTION
TDS stands for "Tax Deducted at Source"
It is an example of 'Direct tax', which applies on different types of incomes, therefore it is an also example of income tax.



TDS INCOME EXAMPLES

Interest on securities, Debentures.

Interest other than interest on securities.

Winnings from Lottery or Crossword Puzzles.

Winnings from horse races.

Insurance Commission.

Commission etc. on the sale of Lottery tickets.

Commission, brokerage etc.

Rent of Land, Building or Furniture.

Rent of Plant, Machinery or Equipment.

Fees for professional or technical services.

So on...

TDS FEATURES AND CHARACTERISTICS

1. TDS is an example of direct tax because it's a type of income tax.

2. Its apply on certain types of incomes with a required minimum amount.

3. It consisted of (Income Tax, Surcharge, Education Cess, Sec. Education Cess).

TDS COMPONENTS

What is TAN?TAN stands for 'Tax Deduction Account Number' and it is issue by Income-tax Department to all the persons, who deducting tax at source. TAN has to be mentioned in all relevant challans, tax deduction certificates, TDS returns and other notified documents.

Who has to Deduct Tax?
Any person making the payments to third parties as specified in scope and applicability section are required to deduct tax at source.

Who is a Deductee?
As per Income Tax Act, the Tax will be deducted at source based on the prescribed rate on payments made to the third parties, who are Assessees (includes individual & HUF as covered U/S 44AB) carrying on the business of following types.

Such Tax will be deducted at time of payment or credit whichever is earlier.
Individual 

Hindu Undivided Family (HUF) 

Body of Individual 

Association of person 

Co-Operative society 

Local Authority 

Partnership firm 

Domestic company (Indian company) 

Foreign company 

Artificial Judicial Person

HOW TO ENABLE TDS

STEPS TO ENABLE TDS IN TALLY ERP 9

1. Open an already existing company.

2. Press “F11” key.

3. Select the “Statutory & Taxation” from the “Company feature”

4. Make “yes” to Enable TDS: the following options.

TDS LEDGERS IN TALLY ERP 9

To implement TDS, we need at-least three ledgers for each TDS entry/transaction.

TDS EXPENSE LEDGER
Ledger name: Technical Service Charges A/c.

Name: Indirect Expenses.

Is TDS Applicable: Yes.

Default nature of payment: Fee for professional or Technical services.

TDS CREDITOR LEDGER
Ledger name: Dream Tech. Solution

Group name: Sundry creditor

Maintain balances bill by bill: No

Is TDS Deductable: Yes

Deductee Type: Company-Resident

TDS TAX LEDGER
Ledger name: TDS (Technical service) A/c

Group: Duties & taxes

Type Duty/Tax: TDS

Nature of payment: Fee for professional or Technical services.

TDS REPORT IN TALLY

STEPS FOR TDS REPORT IN TALLY ERP 9

1. Click on “Display” Menu.

2. Click on “Statutory Reports.”

3. Click on "TDS Reports”

4. Now click on "TDS Outstandings"

TDS EXERCISE

Company name: ABC Electronics

Inventory Details

Stock items	Brand	Quantity	Stock price	Sales price
Pen drive	Scan disk	400	250	300
Refrigerator	LG	50	20,000	22,000
Radio	Phillips	150	2,500	3,500
DVD Player	Phillips	140	4,000	4,500

Ledger Entries

Opening balance Rs. 7,50,000

Cash in bank Rs. 16,50,000

Machinery Amt. Rs. 75,000

Voucher Entries

1. Purchase goods (15 DVD Player, 40 Radio) by cash with 2% discount.

2. Purchase goods by cash (100 Pen drive) with 5% discount 

3. Paid commission Amount Rs. 7,500 with TDS To Mr. Sunil  

4. Paid Technical service charges Rs. 40,000 with TDS to Dinesh IT solution

5. Sold goods for cash (4 DVD player) with 2% discount.

6. Depreciation 2% on old furniture (Total value amount Rs. 25,000)

7. Withdraw Cash Rs. 7,00,000 from bank to office use.

8. Newspaper expense charges Rs. 500

9. Depreciation 4% on machinery

10. Repair old machinery charges Rs. 7,000

11. Withdraw Cash Rs. 15,000 from bank to personal use.

12. Paid office Rent (Amount Rs. 1,85,000) with TDS to Mr. Amit

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