18 tax deducted at source

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Lesson 18: Tax Deducted at Source
Tax deducted at source is one of the modes of collecting Income-tax from the assessees. Such
collection of tax is effected at the source when income arises or accrues. Hence, where any
specified type of income arises or accrues to any one, the Income-tax Act enjoins on the payer of
such income to deduct a stipulated percentage of such income by way of Income-tax and pay only
the balance amount to the recipient of such income.
The tax so deducted at source by the payer has to be deposited in the Government treasury to the
credit of Central Government within the specified time. The tax so deducted from the income of
the recipient is deemed to be payment of Income-tax by the recipient at the time of his assess-
ment.
The person responsible for deducting Tax at source is liable to issue a certificate to the person
from whom the tax is deducted, so that the person can submit the same to Income Tax authorities.
18.1 Basic concepts of TDS
It is important to understand some of the terminologies & concepts of TDS :
Scope and Applicability
At present, incomes from several sources are subjected to tax deduction at source. Some of such
income which are subject to T.D.S. are :
Salary
Interest on securities, Debentures
Lesson Objectives
On completion of this lesson, you will learn how to
Configure Tax Deducted at Source in Tally.ERP 9
Record TDS Transactions
Generate TDS Reports and Challans

Tax Deducted at Source
58
Deemed Dividend
Interest other than interest on securities
Winnings from Lottery or Crossword Puzzles
Winnings from horse races
Payment to contractors (Other than Advertisement)
Payment to contractors (Advertisement Contractors)
Payment to Sub-contractors
Payments to non-residents
Payment to non-resident Sportsmen or Sports Association
Payment in respect of deposit under NSS
Payment on Account of Re-purchase of Units by Mutual Fund or UTI
Payments in Respect of Units to an Offshore Fund
Payment of Compensation on Acquisition of Immovable Property
Insurance Commission
Commission etc. on sale of Lottery tickets
Commission, brokerage etc
Rent of Land, Building or Furniture
Rent of Plant, Machinery or Equipment
Royalty Agreement is MAde on Or After June 1, 2005
Short-Term Capital Gains U/s 111A
Fees for professional or technical services
Fees for Tech. Services Agreement is Made on Or After June 1, 2005
Income in Respect of Units of Non-Residents
Income from foreign currency bonds or shares of Indian company
Income of Foreign Institutional Investors From Securities
Income From Foreign Exchange Assets Payable to an Indian Citizen
Income by Way of Long Term Capital Gains Referred to in Section 115E
Any other Interest on Securities
Interest on 8% Savings (Taxable) Bonds, 2003
What is TAN?
TAN is the Tax Deduction Account Number issued by the Income-tax Department to all persons
deducting tax at source. TAN has to be quoted in all relevant challans, tax deduction certificates,
TDS returns and other notified documents. To obtain TAN, all persons or organisations are
required to apply in Form 49B to the TIN Facilitation Centres of NSDL.

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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 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 (BOI)
Association of person (AOP)
Co-Operative society
Local Authority
Partnership firm
Domestic company (Indian company)
Foreign company
Artificial Judicial Person
18.2 Configuring TDS in Tally.ERP 9
The TDS module in Tally.ERP 9 is integrated with financial accounts and takes care of all the TDS
and eTDS requirements of your business, right from voucher entry to report generation. Tally.ERP
9 completely automates your TDS management and accurately computes Tax to be deducted at
source & TDS payable amount, TDS payment challans, TDS Certificates, Statutory Returns and
other related MIS reports.
Its eTDS features further assist you to file your mandatory tax returns in electronic format as
specified by the Income Tax Department. It helps in minimizing error-prone entry of information,
incorrect remittances and also provides accounting for interest & penalties (if any) for smooth &
effective functioning of your business.
Features of TDS compliant Tally.ERP 9
Tally.ERP 9 comprises of comprehensive features to ensure accurate & automatic computation of
Tax Deductible at Source for Non-Salaried deductees according to the provisions stipulated in the
Income Tax Act.
The TDS functionality in Tally.ERP 9 encompasses the following salient features:
Simple & User friendly
Easy and quick to setup & implement

60
Maintains complete tracking of each transaction from Booking, deduction tillpayment
Allows deduction of TDS at the time of Booking expenses in the same voucher or sepa-
rately at a later date
Allows deduction of TDS at Lower / Zero Rate
Allows deduction of TDS on multiple expenses of single nature of payment type in a single
voucher.
Allows computation of TDS on Expenses partly subject to tax
Allows TDS calculation on advance payments
Provides facility to compute TDS with/without considering Surcharge Exemption Limits for
parties
Provides retrospective surcharge calculations for prior / current period
Allows partial / full payment of Tax deducted at source
Provides automatic computation of TDS amount for each nature of payment
Generates TDS payment Challan ITNS 283 (for Corporates & Non-Corporates)
Generates TDS Certificates, TDS Outstanding report and various other TDS related MIS
Reports
Facilitates automatic generation of Quarterly as well as Annual eTDS returns in the physi-
cal as well as eReturns formats.
Allows Challan reconciliation facility to keep track of issue of TDS certificates and remit-
tance through challans.
Comprises of all required provisions for TDS as specified by Income Tax Department
Also generates consolidated TDS Certificates, Challan and Annual Returns for statutory
and tax audit purpose.
18.2.1 Enabling TDS in Tally.ERP 9
It takes a one-time configuration in Tally.ERP 9 for TDS features to be activated. Follow the steps
given below to enable TDS in Tally.ERP 9 for a new company, M/s. National Enterprises
M/s. National Enterprises, is a domestic company engaged in manufacturing cement and
other water proofing components.
The first step is to create a Company as shown below :
Step 1: Company Setup
In the Company Creation Screen,
Select India in the Statutory Compliance for field
Specify State, Pin code, Telephone, Mobile, E-mail details
Specify 01/04/09 in the Financial Year from field

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Specify 01/04/09 in the Books beginning from field
Figure 18.1 Company Creation
Step 2: F11: Statutory & Taxation
Set Enable Tax Deducted at Source (TDS) to Yes
Set Set/Alter TDS Details to Yes and press Enter

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Figure 18.2 F11: Statutory & Taxation
Step 3: Company TDS Deductor Details
Specify Tax Assessment Number (TAN) of the Company (TAN is a ten-digit alphanumeric
number, issued to the deductors by the Income Tax Department).
Specify the Income Tax Circle / Ward (TDS) details of the deductor
Specify the Deductor Type as Others for the Deductor Types other than government (if
the deductor is a government body, select Government as the Deductor Type)

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Figure 18.3 Company TDS Deductor Details
Specify the Name of person responsible and his/her designation details as shown
Figure 18.4 Company TDS Deductor Details
Press Enter to accept
Enable VAT and specify VAT TIN Number, if Value Added Tax (VAT) is applicable in the
State or otherwise specify the Local Sales Tax Number & Interstate Sales Tax Number
Specify the PAN details as shown
The format of the 10 digit alphanumeric TAN - BLRN00789B is :
BLR indicates the location code of the TAN allotment center. (Eg:
BLR for Bangalore)
N indicates the first alphabet of the deductor name.
00789 is the number within each location.
B is the check digit for security and verification.

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The completed F11: Statutory & Taxation Features screen appears as shown :
Figure 18.5 Enabling VAT
Press Enter to accept F11: Statutory & Taxation Features screen
18.2.2 TDS Statutory Masters
The statutory masters contains details in respect of TDS nature of payments, Deductee Types,
rate of TDS for each nature of payment and period of applicability. These masters are loaded
automatically soon after enabling TDS in Tally.ERP 9.
Tally.ERP 9 conforms to all statutory provisions and in case of any changes / amendments in
Income Tax laws, the same can be updated by downloading the Stat.900 file from the Tally
Website.
TDS Nature of Payments
Go to Gateway of Tally > Display > Statutory Info. > TDS Nature of Pymts

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Figure 18.6 TDS nature of payments
Select a Nature of Payment from the list and press Enter
Figure 18.7 TDS nature of payments
Deductee Types
Go to Gateway of Tally > Display > Statutory Info.> Deductee Types

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Figure 18.8 Deductee Types
Select a Deductee Type from the list and press Enter
Figure 18.9 Deductee Types

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18.3 Creation of Masters
Once you have enabled the company for TDS, create necessary Expenses ledger, Party ledgers
and TDS ledger masters. The TDS option would now be available in each type of ledger masters.
18.3.1 Expenses Ledger Accounts
Create the following expense ledger accounts :
Go to Gateway of Tally > Accounts Info. > Ledgers> Create
Type Consultancy Charges as the Ledger Name
Select Indirect Expenses in the Under field
Set Use for Assessable Value Calculation to No
Set Is TDS Applicable to Yes
In Default Nature of Payment filed, select Fees for Professional Or Technical Services
from the List of TDS Nature of Pymt.
Ledger Under
Inventory
Values
are
affected
Is TDS
Applica-
ble
Default Nature of
Payment
Consultancy Charges Indirect
Expenses
No Yes Fees for Professional
Or Technical Services
Advertisement Expenses Indirect
Expenses
No Yes Payment to Contrac-
tors (Advertisement
Contractors)
Rent Indirect
Expenses
No Yes Rent of Land, Building
Or Furniture
Commission Charges Indirect
Expenses
No Yes Commission or
Brokerage

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Figure 18.10 Ledger Creation - Consultancy charges
The completed Consultancy Charges ledger creation screen is shown below :

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Figure 18.11 Ledger Creation - Consultancy charges
Similarly, create other Expenses Ledgers with the required TDS Nature of Payments.
18.3.2 TDS Ledger Accounts
Create the following TDS Tax ledgers :
Ledger Under
Type of
Duty/Tax
Nature of Pymt
TDS on Consultancy Charges Duties & Taxes TDS Fees for Professional Or
Technical Services
TDS on Advt. Expenses Duties & Taxes TDS Payment to Contractors
(Advertisement Contrac-
tors)
TDS on Rent Duties & Taxes TDS Rent of Land, Building Or
Furniture
TDS on Commission Duties & Taxes TDS Commission or Brokerage

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In the Ledger Creation screen,
Type TDS on Consultancy Charges in the Name field
Select Duties & Taxes group in the Under field
Select TDS from the list in the Type of Duty/Tax field and press Enter
Figure 18.12 Ledger Creation TDS on Consultancy Charges
Select Fees for Professional Or Technical Services from the list, in the Nature of Pay-
ment field

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Figure 18.13 Ledger Creation TDS on Consultancy Charges
Set No in the Inventory values are affected field
The completed TDS on Consultancy Charges ledger creation screen is as shown :

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Figure 18.14 Ledger Creation - TDS on Consultancy Charges
Similarly, the completed TDS on Advertisement Expenses ledger will appear as shown :

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Figure 18.15 Ledger Creation - Advertisement Expenses
Similarly, the completed TDS on Rent ledger will appear as shown :

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Figure 18.16 Ledger Creation - TDS on Rent
And the completed TDS on Commission ledger will appear as shown :

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Figure 18.17 Ledger Creation - TDS on Commission
18.3.3 Party Ledger Accounts
Create the following Party ledgers :
It is recommended to create separate TDS ledgers for each type of Nature
of TDS payments, since TDS payments are required to be paid separately
for each type of TDS nature of payment.
Ledger Under
Maintain
balances
bill-by-bill
Inven-
tory Val-
ues are
affected
Is TDS
Deduct
able
Deductee
Type
Evergreen Consulting Services Sundry
Creditors
Yes No Yes Company
- Resident

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Set Up:
In F12: Configuration (Ledger Configuration)
Set Allow ADVANCED entries in TDS Master to Yes
Figure 18.18 F12: Ledger Configuration
Type Evergreen Consulting Services in the Name field
Select Sundry Creditors group in the Under field
Set Maintain balances bill-by-bill to Yes
Set Inventory Values are affected to No
Set Is TDS Deductable to Yes and press Enter
Star Advertisement Agency Sundry
Creditors
Yes No Yes Partner-
ship Firm
Ramesh Kumar Sundry
Creditors
Yes No Yes Individual
/HUF -
Resident
Silverplus Enterprises Sundry
Creditors
Yes No Yes Body of
Individu-
als

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Figure 18.19 Ledger Creation - Evergreen consulting services
Select Company - Resident from the list, in the Deductee Type field

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Figure 18.20 Ledger creation - Deductee Type
Set Use Advanced TDS Entries to Yes

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Figure 18.21 Ledger creation - Advanced TDS Entries
Press Enter, the Advanced TDS Entries subscreen appears,
In the Advanced TDS Entries subscreen,
Set Ignore Surcharge Exemption Limit to No
Set Ignore Income Tax Exemption Limit to No
Set Zero/Lower Deduction to No
Set Deduct TDS in Same Voucher if applicable to No
Figure 18.22 Ledger creation - Advanced TDS Entries
Press Enter to accept the screen

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Type the Mailing address, State, PIN Code and Tax information of the party
Set/Alter VAT Details to No
The completed Evergreen Consulting Services ledger creation screen is as shown:
Figure 18.23 Completed Ledger Creation - Evergreen consulting services
Similarly, create other Sundry Creditors ledgers with appropriate Deductee types.
When Ignore Surcharge Exemption Limit is set to Yes, the Surcharge
amount is automatically calculated at the applicable rates without consider-
ing the threshold limits prescribed by the ITD, for the respective persons.

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18.3.4 Bank Accounts
Type HDFC Bank as the Ledger Name
Group it under Bank Accounts group
Under Mailing Details,
In Address field enter the Bank Branch Address.
Select appropriate state in State field.
In Pin Code field enter the pincode of the City
In Account Number field enter the account number as 005364477129
In Branch Name field, enter Kasturba Road.
Enter the Bank’s BSR Code as 0012934 (BSR Code is a 7 digit Number allotted by
Reserve Bank of India (RBI) to Bank).
The Completed Bank ledger screen is displayed as shown
While creating Star Advertisement Agency and Ramesh Kumar
Ledger, in Advanced TDS Entries subscreenset Ignore Surcharge
Exemption Limit to Yes.
When Is TDS Deductable option is set to Yes, Maintain balances
bill-by-bill is automatically set to Yes (if not enabled previously).
In Tally.ERP 9, Is TDS Deductable option is available for all ledgers
created under Sundry Creditors and Sundry Debtors Groups.
Ledger Under Effective Date
for Reconciliation
HDFC Bank Bank Accounts 01/04/2009

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Figure 18.24 Completed Bank Ledger Creation Screen
18.4 Processing Transactions
As discussed earlier, Tax Deducted at Source on incomes specified by Income Tax department is
affected at source when income arises/ accrues or paid whichever is earlier. Let us consider the
following transactions to illustrate the TDS functionality in Tally.ERP 9.
18.4.1 Booking Expenses and Deducting TDS
Example 1:
On 01/04/09, M/s. National Enterprises received a Bill (Vide No. ECS/001/09-10) from
Evergreen Consulting Services, for Rs. 27,000/- towards Consultancy Charges.
Consultancy Charges is subject to TDS under ‘Fees for Professional or Technical Services’
Nature of Payments. The applicable Income tax rates for payment of ‘Fees for Professional
or Technical Services’ to ‘Company Resident Deductee’ Type is given below :
Particulars Rate
TDS 10%
Surcharge -

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Create Journal Voucher
Go to Gateway of Tally > Accounting Vouchers > Press F7: Journal
1. Press F2 and change the date to 01-04-2009
2. Select Consultancy Charges in the Debit field and press Enter
3. Enter 27,000 in the Amount field.
The Expense Allocation screen is displayed as shown
Figure 18.25 Expense Allocation Screen
The TDS Nature of Payment Details screen displays the Nature of Payment and the Assessa-
ble Value of the expenditure.
Press Enter to accept Fees for Professional or Technical Services as Nature of Pay-
ment.
The amount in the Assessable Value is defaulted to 27,000.

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Figure 18.26 TDS Nature of Payment Details with Assessable Value
4. Select Evergreen Consulting Services in the Credit field and press Enter.
The TDS Details screen is displayed as shown
Figure 18.27 TDS Details Screen
In the TDS Details screen, provide the following details
Select New Ref as the Type of Ref. field

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Type the Reference Number in the Name field (By default Jrnl / 1-1 is prefilled)
Select Fees for Professional Or Technical Services in Nature of Payment field.
Figure 18.28 TDS Details – Nature of Payment Selection
Select TDS on Consultancy Charges from the list of TDS Duty Ledgers
The Assessable Amount field is defaulted with the amount specified against the
expenses ledger
Set Yes in Deduct Now field (This field will be set to Yes or No depending on the tax
deduction, if the deduction has to be done later, this option can be set to No).
The Tax amount deducted at source is displayed in the TDS Amount field.
The amount (after deducting TDS) payable to the Party is displayed in the Payable
Amount field.
The completed TDS Details screen is displayed as shown

86
Figure 18.29 Completed TDS Details Screen
Press Enter to accept TDS Details
5. The Payable Amount calculated in the TDS Details screen will be defaulted in the Party’s
Amount (Credit) field
6. Press Enter to view Bill–wise Details screen
7. In Bill–wise Details screen,
Select New Ref as the Type of Ref
In the Name field, enter the Bill name as ECS/001/09-10
Skip the Due Date or Credit Days field
Accept the default amount allocation and Dr/Cr. (By default, Tally.ERP 9 displays the Bill
amount in the amount field as the credit balance).
Press Enter, select New Ref as Type of Ref and Enter Bill name as ECS/TDS/001
Press Enter to accept the Amount allocation
The completed Billwise Details screen is displayed as shown

87
Figure 18.30 Bill–wise Details Screen
In the above screen, the amount payable to the party after deduction of TDS is displayed sepa-
rately and the TDS deducted amount is displayed separately for easy identification of Bill amount
in the outstanding statement.
8. Select TDS on Consultancy Charges in the Credit field and press Enter to accept the
amount.
9. Enter the details of the transaction in the narration field.
The completed Journal Voucher is displayed as shown

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Figure 18.31 Journal Voucher
10.Press Enter to accept
Example 2:
On 13/04/09, M/s. National Enterprises received a Bill (Vide No. SAA/102) for Rs. 36,000/-
from Star Advertisement Agency towards Advertisement Expenses.
The applicable Income tax rates for ‘Advertisement Expenses’ payable to ‘Contractors’ is
given below :
Particulars Rate
TDS 1%
Surcharge -

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Create Purchase Voucher
Set Up:
In F12: Configure, set Use Common Ledger A/c for Item Allocation and Use Defaults
for Bill Allocations to No
Go to Gateway of Tally > Accounting Vouchers > Press F9: Purchase
1. Press Alt + I for Account Invoice mode
3. In Party’s A/c Name field, select Star Advertisement Agency from the List of Ledger
Accounts
4. Under Type of Dealer, Select Not Applicable
5. Under Particulars, select Advertisement Expenses and press Enter
6. Type 36000 in the Amount field, press Enter to view TDS Nature of Payment Details screen
and accept the default details in the screen.
Figure 18.32 Expense Allocation screen

90
Press Enter to accept Payment to Contractors (Advertisement Contractors) as Nature
of Payment.
7. Select TDS on Advertisement Expenses from the List of Ledger Accounts
8. Press Enter twice to view TDS details screen.
9. In the TDS Details screen, provide the following details
Type the Reference Number in the Name field (By default Purc / 1-1 is prefilled)
Select Payment to Contractors (Advertisement Contractors) in Nature of Payment
field.
Select TDS on Advertisement Expenses from the list of TDS Ledgers
The Assessable Amount field is defaulted as 36,000 and the TDS Amount is calculated
automatically based on the applicable TDS rates.

91
Figure 18.34 TDS Details
10.Press Enter to accept the TDS Details
11.In the Bill-wise Details screen
In the Name field, enter the Bill name as SAA/102
Accept the default amount allocation and Dr/Cr.

92
Figure 18.35 Bill–wise Details
12.Enter the details of the transaction in the Narration field, if required.
The completed Purchase Voucher is displayed as shown

93
Figure 18.36 Completed Purchase Voucher
13.Press Enter to accept.
18.4.2 Booking Expenses and Deducting TDS Later
Example 3:
On 20/04/09, M/s. National Enterprises received a Bill (Vide No. 024/09) for Rs. 9,000/- from
Silverplus Enterprises towards commission charges.
The company intends not to deduct TDS on the above transaction at the time of booking
the expenses.
Go to Gateway of Tally > Accounting Vouchers > Press F7:Journal
2. Select Commission Charges in the Debit field and press Enter
3. Enter 9,000 in the Amount field and press Enter
4. The Expense Allocation screen appears as shown,

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Figure 18.37 Expense Allocation screen
Press Enter to accept Commission Or Brokerage as Nature of Payment.
The Assessable Value field is defaulted as 9,000

95
5. Select Silverplus Enterprises in the Credit field and press Enter, the TDS Details screen
appears,
6. In TDS Details screen, enter the following details
Select New Ref in Type of Ref field
In the Name field, accept the default TDS reference number as Jrnl / 2-1
Select Commission Or Brokerage in Nature of Payment field
Select TDS on Commission in the TDS Duty Ledger field
Set Deduct Now to No (in order to deduct the TDS later).
The Payable Amount field displays the amount payable to the Party.
7. Press Enter to accept the TDS details screen
8. The Payable Amount calculated in the TDS Details screen is defaulted in the Party’s Amount
(Credit) field.
9. Press Enter to view Bill–wise Details screen.
10.In Bill–wise Details screen,

96
In the Name field enter the Bill name as 024/09
Accept the default amount allocation and Dr/Cr.
Figure 18.40 Bill–wise Details
Press Enter to accept Bill-wise Details screen.
11.Type the details of the transaction in the Narration field, if required.

97
12.Press Enter to accept
Example 4:
On 23/04/09, M/s. National Enterprises paid Rs. 35,640/- to Star Advertisement Agency
towards Advertisement Expenses (vide Ch. No. 145687).
Setup:
In F12: Configure, set Use Single Entry mode for Pymt/Rcpt/Contra to Yes.
The Deduction of TDS on the above Transaction (i.e., Commission
Charges of Rs. 9,000/- payable to Silverplus Enterprises) is discussed in
Example 8 dt. 30/04/09.

98
Create Payment Voucher
Go to Gateway of Tally > Accounting Vouchers > Press F5: Payment
1. Press F2 and change date to 23/04/2009
2. In Debit field, select Star Advertisement Agency from the List of Ledger Accounts
3. Enter 35,640 in Amount field and press enter to view Bill-wise Details screen
4. In Bill-wise Details screen
Select Agst Ref in the Type of Ref
Select SAA/102 from the List of Pending Bills in Name field, Amount is defaulted auto-
matically.
The Completed Bill-wise Details screen is displayed as shown.
5. In Credit field, select HDFC Bank from the List of Ledger Accounts, the Amount is
defaulted automatically
6. Enter Cheque No. 145687 in Narration field.
The completed Payment Voucher is displayed as shown

99
Figure 18.43 Completed Payment Voucher
7. Press Enter to accept
Example 5:
On 23/04/09, M/s. National Enterprises paid Rs. 24,300/- (vide Ch. No. 145690) to Evergreen
Consulting Services towards final settlement of Bill No. ECS/001/09-10 dt. 10/04/09.
1. Press F2 and change date to 23/04/2009
2. In Debit field, select Evergreen Consulting Services from the List of Ledger Accounts
3. Enter 24,300 in Amount field and press enter to view Bill-wise Details screen
4. In Bill-wise Details screen
Select ECS/001/09-10 from the List of Pending Bills in Name field, Amount is defaulted
automatically.
The Completed Bill-wise Details screen is displayed as shown.

100
5. In Credit field, select HDFC Bank from the List of Ledger Accounts, Amount is defaulted
automatically
6. Enter Cheque No. 145690 in Narration field.

101
Figure 18.45 Completed Payment Voucher
18.4.3 TDS Deduction @ Lower Rate
The Income Tax Act, as per Sec 197 allows the benefit of deduction of tax at source at a lower
rate on filing of declaration in the prescribed form with the payer.
Example 6:
On 24/04/09, National Enterprises received a bill for Rs. 45,000/- from Prompt Consultancy
towards commission charges.
Prompt Consultancy has been granted a lower deduction certificate for deduction of Tax @
5% on commission.
Set Up:
In F12: Configure (Ledger Configuration)
Set Allow Advanced entries in TDS Masters to Yes

102
Figure 18.46 Ledger Configuration
Create Party Ledger
Go to Gateway of Tally > Accounts Info. > Ledgers > Create
Enter the Name of the Party Ledger e.g. Prompt Consultancy
Select Sundry Creditors from the List of Groups in the Under field
Enter the Default Credit Period, if required.
Set Is TDS Deductable to Yes
In the Deductee Type field, select Partnership Firm from the List of Deductee Type
In Advanced TDS Entries screen
Set the option Zero / Lower Deduction to Yes
Figure 18.47 Advanced TDS Entries
In Zero / Lower Deduction Details screen
Select Nature of payment as Commission Or Brokerage
Select Section Number as 197
Enter the Certificate No./ Date
Enter the Applicable From date
Enter the Applicable To date
Enter the alloted TDS rate
Enter the Surcharge, Ed Cess and Sec Ed Cess, if applicable (Tally.ERP 9 defaults
the rate as Zero).

103
Figure 18.48 Zero / Lower Deduction Details
The completed Prompt Consultancy ledger creation screen is as shown:
Figure 18.49 Ledger Creation - Prompt Consultancy

104
2. Select Commission Charges in the Debit field and press Enter
Press Enter to accept Commission or Brokerage as Nature of Payment.

105
4. Select Prompt Consultancy in the Credit field and press Enter.
In the TDS Details screen, provide the following details
Select Commission or Brokerage in Nature of Payment field.

106
Select TDS on Commission from the list of TDS Duty Ledgers
The Assessable Amount field is defaulted with the amount specified against the
expenses ledger
Set Yes in Deduct Now field (This field will be set to Yes or No depending on the tax
deduction, if the deduction has to be done later, this option can be set to No).
The Tax amount deducted at source is displayed in the TDS Amount field.
The amount (after deducting TDS) payable to the Party is displayed in the Payable
Amount field.
5. The Payable Amount calculated in the TDS Details screen will be defaulted in the Party’s
Amount (Credit) field
In the Name field, enter the Bill name as PCS/001/09-10

107
Press Enter, select New Ref as Type of Ref and Enter Bill name as PCS/TDS/001
In the above screen, the amount payable to the party after deduction of TDS is displayed sepa-
rately and the TDS deducted amount is displayed separately for easy identification of Bill amount
in the outstanding statement.
8. Select TDS on Commission in the Credit field and press Enter to accept the amount.

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18.4.4 TDS Deduction @ Zero Rate
The Income Tax Act, as per Sec 197A allows the benefit of non-deduction of tax at source to an
individual payee on filing of declaration in the prescribed form with the payer.
Example 7:
On 25/04/10, National Enterprises received a bill for Rs. 9,000/- from Crown Advisory
Services towards Fees for Professional Services.
Crown Advisory Services has been granted a No Deduction Certificate.
Set Up:
In F12: Configure (Ledger Configuration)
Set Allow Advanced entries in TDS Masters to Yes

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Figure 18.56 Ledger Configuration
Create Party Ledger
Go to Gateway of Tally > Accounts Info. > Ledgers > Create
Enter the Name of the Party Ledger e.g. Crown Advisory Services
Select Sundry Creditors from the List of Groups in the Under field
Enter the Default Credit Period, if required.
Set Is TDS Deductable to Yes
In the Deductee Type field, select Association of Persons from the List of Deductee Type
In Advanced TDS Entries screen
Set the option Zero / Lower Deduction to Yes
Figure 18.57 Advanced TDS Entries
In Zero / Lower Deduction Details screen
Select Nature of payment as Commission Or Brokerage
Select Section Number as 197A
Enter the Certificate No./ Date
Enter the Applicable From date
Enter the Applicable To date
The TDS rate will be defaulted to 0%

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Figure 18.58 Zero / Lower Deduction Details
The completed Crown Advisory Services ledger creation screen is as shown:
Figure 18.59 Ledger Creation - Crown Advisory Services

111
2. Select Consultancy Charges in the Debit field and press Enter
Press Enter to accept Fees for Professional Or Technical Services as Nature of Pay-
ment.

112
4. Select Crown Advisory Services in the Credit field and press Enter.
Select Fees for Professional Or Technical Services in Nature of Payment field.

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In Is Zero/ Lower Rate field, select section 197A for zero deduction
6. The Payable Amount is defaulted in the Party’s Amount (Credit) field
In the Name field, enter the Bill name as CAS/001/09-10

114

115
Example 8:
On 30/04/09, M/s. National Enterprises deducts TDS at the following rates on Commission
payable to Silverplus Enterprises (vide B.No. 024/09 dt. 20/04/09 - Refer Example 3).
The applicable Income tax rates for Commission is as follows :
2. Press Alt +S or click on S: TDS Deduction button, to view TDS Deductions screen.
Particulars Rate
TDS 10%
Surcharge -

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3. In TDS Deduction screen,
In Till Date field, enter the date till which the TDS deduction is to be made (i.e., 30-04-
2009)
Select Silverplus Enterprises from the List of Ledger(s) in the Party field
Figure 18.66 TDS Deductions – Party Selection
Select Commission Or Brokerage from the List of Nature of Payments
Figure 18.67 TDS Deduction – Nature of Payment Selection
Press Enter to accept the TDS Deductions subscreen
4. The TDS amount with the respective bill details will be prefilled automatically

117
Figure 18.68 Journal Voucher with Auto filled TDS values
5. In the Bill-wise Details screen,
Select 024/09 dated 20-Apr-2009 in the Name field and press Enter
The amount is defaulted as 900
The completed Bill-wise Details is displayed as shown

118
Figure 18.69 Bill-wise Details screen
6. Enter the details of the transaction in the Narration field, if required.

119
7. Press Enter to accept.
18.4.5 Deducting TDS on Payments
Example 9:
On 30/04/09, M/s. National Enterprises paid Rs. 15,000/- to Mr. Ramesh Kumar (Landlord)
towards Rent for the month of April 2009 (vide Ch. No. 145787).
The applicable Income tax rates for payment of ‘Rent’ to ‘Individual / HUF - Resident’
Deductee Type is given below :
Particulars Rate
TDS 15%
Surcharge -

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2. In Debit field, select Ramesh Kumar from the List of Ledger Accounts
3. Enter 15,000 in Amount field and press Enter to view Bill-wise Details screen
4. In Bill-wise Details screen,
Select New Ref from the Method of Adj in the Type of Ref field
Enter the Bill name as Apr’09
Press Enter to skip the Due Date, or Credit Days filed
Press Enter to accept the Amount (i.e., 15,000)
Figure 18.71 Bill-wise details Screen
Press Enter to accept the Bill-wise Details screen
5. In the Credit field, select TDS on Rent from the List of Ledger Accounts and press Enter
Type the Reference Number in the Name field (By default, Pymt / 3-1 is prefilled)
Select Rent of Land, Building Or Furniture in Nature of Payment field.
The Assessable Amount field is defaulted as 15,000 and the TDS Amount (i.e., 2250) is
calculated automatically based on the applicable TDS rates.

121
Press Enter to accept the TDS Details screen
7. In Credit field, select HDFC Bank from the List of Ledger Accounts, the balance Amount is
defaulted automatically as 12,750.
8. Enter the cheque details in the Narration field.

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Figure 18.73 Payment Voucher
18.4.6 Payment of TDS
As per Income Tax Act, Corporate & Non- Corporate entities (deductors) making payments (spec-
ified under Income Tax Act) to third parties (deductees) are required to deduct tax at source at the
prescribed rates on such payments.
The TDS so deducted should be deposited to the credit of the Central Government within one
week from the last day of the month in which the deduction is made, into any of the designated
branches of banks authorized to collect taxes on behalf of Government accompanied by Income
Tax Challan ITNS 281.
Example 10:
On 05/05/09, M/s. National Enterprises paid Rs. 2,700/- to Government towards TDS on
Consulting Charges for the month of April 2009.

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Setup:
In F12: Configure (Payment Configuration), ensure Use Single Entry mode for Pymt/Rcpt/
Contra is set to Yes.
Step 1 : Create Payment Voucher
1. Press F2 and change date to 05-05-2009
2. Press Alt+S or click S: TDS Helper button, to view TDS helper screen.
3. In the TDS Helper Screen,
Enter the date till which the TDS deductions are to be considered (i.e., 30-04-2009) in
Deducted Till Date field
Select 194J in the Section field
Select Fees for Professional Or Technical Services as the Nature of Payment
Select the Deductee Status as Company
Select HDFC Bank from the List of Ledger Accounts
The completed TDS Helper screen is displayed as shown
Figure 18.74 TDS Helper Screen

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Press Enter to accept the TDS helper screen
4. The Bank selected in the TDS Helper screen is defaulted automatically in the Account field.
5. Set Provide Details to Yes, to view the TDS Payment Details
Figure 18.75 TDS Payment details
6. In the Payment Details screen
Enter the periodicity of the payment of TDS amount in the From Date and To Date field
respectively
Enter the Cheque/DD No details
Select the Bank in the Name of Bank field

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Figure 18.76 Payment Details– List of Banks
Enter the Branch Account Number
Enter the Bank Branch name
Enter the BSR code of the branch
Enter the Challan No. and Challan Date
The completed Payment Details screen is displayed as shown
Figure 18.77 Completed Payment Details Screen
7. Enter the details of the transaction in the Narration field, if required
The Completed TDS Payment voucher is displayed as shown

Tally.ERP 9 allows you to enter above transaction in Double Entry mode
also.
126
Figure 18.78 TDS Payment Voucher
Step 2 : Print ITNS Challan 281
The TDS amount is remitted to the credit of the Government through TDS Challan ITNS 281. To
print the TDS Challan, follow the steps given below
1. Press PageUp to go back to payment voucher entry
2. Press Alt + P from the payment voucher to view the Voucher Printing screen
3. In the Voucher Printing screen
Ensure Print as TDS Challan is set to Yes
Ensure other details are entered in the similar manner

127
Figure 18.79 Voucher Printing Screen
Press Enter to Print
The Printed ITNS 281 Challan is displayed as shown

128
Figure 18.80 Printed ITNS 281 Challan

129
Example 11:
On 05/05/09, M/s. National Enterprises paid Rs. 360/- to Government towards TDS on
Advertisement Expenses for the month of April 2009.
2. Press Alt+S or click S: TDS Helper button to view TDS helper screen.
3. In TDS Helper screen,
Select 194C in the Section field
Select Payment to Contractors (Advertisement Contractors) as the Nature of Pay-
ment
Select the Deductee Status as Non Company

130
respectively

131
The completed Payment voucher will appear as shown

132

133

134
Example 12:
On 05/05/09, M/s. National Enterprises paid Rs. 3,150/- to Government towards TDS on
Commission for the month of April 2009.
2. Press Alt+S or click S: TDS Helper button to view TDS helper screen.
3. In the TDS Helper Screen,
Select 194H in the Section field
Select Commission Or Brokerage as the Nature of Payment
Select the Deductee Status as Non Company

135
respectively

136

137

138

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18.5 TDS Reports
Tally.ERP 9 provides the facility to generate various TDS reports, Challans and forms in the pre-
scribed format viz., TDS Computation Report, TDS Challan and TDS Statutory Returns for a
month, quarter, year or any given period.
To view the TDS Reports,
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports
Figure 18.91 TDS Reports
18.5.1 Computation
The TDS Computation report displays information about TDS transactions. It includes information
about the total expenses and advances on which TDS is applicable, TDS amount deducted,
balance TDS amount deductible, TDS amount paid and TDS amount pending for payment.
To view TDS Computation report,
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Computation

140
Figure 18.92 TDS Computation
The TDS Computation report is broadly subdivided into 2 sections, namely
Deduction Details: In this section, the Assessable value of Expenses & Advances (com-
prising of TDS Not Applicable, Under Exemption Limit, Zero Rate and the Net Taxable
Expenses & Advances), TDS Deducted amount (at Normal and Lower Rate) and the Bal-
ance Deductable at Normal and Lower Rate is displayed.
Payment Details: In this section, the details of TDS paid during the current and previous
month and the balance payable during the current/previous month is displayed.
TDS Computation Party Wise
To view Party Wise TDS Computation report,
Highlight Expenses & Advances and press Enter to drill down to Party Wise Report

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Figure 18.93 TDS Computation – Party Wise
You can configure the Party wise report, by pressing F12: Configure
In F12: Configure, Show Tax Deductible, Show Balance to be deducted, Show Bal-
ance Payable to Government options are set to Yes
Figure 18.94 F12: Configure
In F12: Configuration,
Set Show Tax Deducted to Yes
Show Tax Deductable Break-up to Yes
Set all other options to No

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Figure 18.95 F12: Configure
Now, the Expenses & Advances report will display the complete break up of Tax, Surcharge,
Education Cess, Secondary and Higher Education Cess details for the tax deducted amount.
The TDS Computation Report displays the details as shown
Figure 18.96 TDS Computation – Party wise
TDS Computation Payment Wise
The TDS Paid report displays the details of TDS payments made during the selected period.
To view Payment Wise TDS Computation,

143
Press Enter on Paid details to drill down to TDS Paid report
The TDS Paid report is displayed as shown
Figure 18.97 TDS Paid Report
TDS Computation Balance Payable
To view TDS Payable report from TDS Computation,
Press Enter on any particular Balance Payable details
The TDS Payable report is displayed as shown

144
Figure 18.98 TDS Payable Report
18.5.2 Challan Reconciliation
As per Income Tax Act, the details of payment of Tax Deducted at Source are required to be
furnished in the TDS certificate issued to the deductee. For this purpose, the Challan details con-
taining the information in respect of Bank Challan No. & Date, Bank Name, BSR Code etc., are
required to be specified. Tally.ERP 9 allows to enter all the required information as specified by
the statutes, by using the Challan Reconciliation facility.
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Challan Reconcilia-
tion >
Press F5: Challan Reconcile
The Challan Reconciliation report is displayed as shown

145
Figure 18.99 Challan Reconciliation
Click on S: Set Challan Details button to fill the challan details..
Figure 18.100 Challan Details
Press Enter to accept the Challan Details.
In our case study (National Enterprises) the challan details for the TDS
Payment entries are entered in the respective Payment Vouchers. Hence,
the details are prefilled in the Challan Reconcilliation Report. However,
where challan details are not entered during payment entry, are required to
be updated in Challan Reconcilliation report before generating Form
16A.

146
The completed Challan Reconciliation screen will appear as shown
Figure 18.101 Challan Reconciliation Screen
Press Enter to accept.
18.5.3 Return
Corporate & Non- Corporate entities (deductors) responsible for making payments (specified
under Income Tax Act) to third parties (deductees) and deducting tax at source at the prescribed
rates on such payments are required to furnish TDS returns containing details of deductee(s) and
the payment details relating to the deposit of such tax to Income tax department.
The following statutory returns have to be filed by the tax deductors :
Form Nature of Payment Periodicity
Form 24 Annual return of 'Salaries' under Section 206 of
Income Tax Act, 1961
Annual

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Tally.ERP 9 allows you to generate and print statutory Returns in physical as well as uploadable
formats as prescribed by the government. In Tally.ERP 9, you can generate the following
Quarterly/Annual Returns
Form 16A
Form 26Q
Annexure to 26Q
Form 27Q
Annexure to 27Q
Form 26
Annexure to 26
Form 27
Annexure to 27
Form 16A
Every person deducting tax at source from payments (as specified in the Income Tax Act) other
than salaries, is required to furnish a certificate in Form 16A to the person on whose account such
tax is paid to the credit of Central Government within the prescribed time and specifying the
amount so deducted, the rate at which the tax has been deducted and any other particulars as
may be prescribed.
Form Nature of Payment Periodicity
Form 26 Annual return of deduction of tax under section
206 of Income Tax Act, 1961 in respect of all
payments other than 'Salaries'.
Annual
Form 27 Statement of deduction of tax from interest,
dividend or any other sum payable to persons
specified under Rule 37A of Income Tax Rules,
1962.
Quarterly
Form 24Q Quarterly statement for tax deducted at source
from 'Salaries'.
Quarterly
Form 26Q Quarterly statement of tax deducted at source in
respect of all payments other than 'Salaries'.
Quarterly
Form 27Q Quarterly statement of deduction of tax from
interest, dividend or any other sum payable to
non-residents.
Quarterly
Form 27A to be filed in physical form with each return.

148
Print Form 16A
Form 16A is a certificate in evidence of deduction of tax at source by the deductor and payment
of the same into credit of the government. Form 16A is essential to claim credit of tax by the
deductor in his Income Tax returns.
To print Form 16A
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Print Form
16A
In Select Item screen,select Silverplus Enterprises from the List of TDS Party Ledgers
Figure 18.102 Select Item Screen
In Printing TDS Form 16A screen, enter the details as shown
Figure 18.103 Printing TDS Form 16A screen

149
The printed Form 16A is displayed as shown
Figure 18.104 Printed Form 16A

150
Form 26Q
Form 26Q is a Quarterly return for deduction of tax in respect of payments made to residents
other than salary. To print Form 26Q
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Form 26Q
In Printing TDS Form 26Q, press Backspace and enter the following details
Figure 18.105 Printing TDS Form 26Q
The printed Form 26Q is displayed as shown

151
Figure 18.106 Form 26Q (Page 1)

152
Annexure to Form 26Q
As per Income Act, the annexures in respect of each deductee with breakup of TDS is required to
be furnished alongwith the Quarterly/Annual Returns. Annexure for each deductee should be
generated in separate page.
To print Annexure to Form 26 Q
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Annexure to
Form 26Q
In Printing TDS Form 26Q, press Backspace and enter the required details
Press Enter to print Annexure to Form 26 Q
The printed Annexure to Form 26Q appears as shown

153
Figure 18.108 Annexure to 26Q
The second page will be printed for the next deductee with the TDS breakup details.
Form 27 Q
Form 27Q is a Quarterly return for deduction of tax in respect of payments made to non-residents
other than salary. To print Form 27Q
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Form 27Q
In Printing TDS Form 27Q screen, press Backspace and enter the required details

154
The printed Form 27Q appears as shown
Figure 18.109 Form 27Q ( Page 1)

155
Annexure to 27Q
As per Income Act, the annexures in respect of each deductee with breakup of TDS is required to
be furnished alongwith the Quarterly/Annual Returns. Annexure for each deductee should be
generated in separate page.
To Print Annexure to Form 27Q
Form 27Q
In Printing TDS Form 27Q, press Backspace and enter the required details
Press Enter to print Annexure to Form 27Q
In our examples, we have not considered payments made to Non-residents.
Hence, the Form 27Q will appear blank.

156
Form 26
Form 26 is an Annual return for deduction of tax in respect of payments made to residents other
than salary. To print Form 26,
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Form 26
In Printing TDS Form 26, press Backspace and enter the required information
Figure 18.111 Printing TDS Form 26
Press enter to print Form 26
The printed Form 26 appears as shown

157
Figure 18.112 Printed Form 26

158
Annexure to Form 26
To Print Annexure to Form 26,
Form 26
In Printing TDS Form 26, press Backspace and enter the required details
The printed Annexure to Form 26 appears as shown
Figure 18.113 Annexure to Form 26
Similarly, the annexure for the subsequent nature of payment will be printed in the next page.
Form 27
Form 27 is an annual return for deduction of tax in respect of payments other than salary made to
Non-residents. To print Form 27
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Form 27
Press Enter to print

159
The printed Form 27 appears as shown
Figure 18.114 Printed Form 27

160
Annexure to 27
To print Annexure to Form 27
Form 27
Press Enter to print
18.5.4 eTDS Returns
With the automation of collection, compilation and processing of TDS returns, ITD notified Elec-
tronic Filing of Returns of Tax Deducted at Source Scheme 2003. Under this scheme :
It is mandatory (w.e.f. June 1, 2003) for corporate deductors to furnish their TDS returns in
electronic form (e-TDS return).
From F.Y. 2004-2005 onwards furnishing TDS returns in electronic form is also mandatory
for government deductors in addition to corporate deductors.
Deductors (other than government and corporates) may file TDS return in electronic or
physical form.
National Securities Depository Ltd. (NSDL) is the e-TDS Intermediary (appointed by ITD) to
receive the e-TDS returns from the deductors, on behalf of ITD.
Deductors furnishing e-TDS returns are required to furnish a control chart - Form 27A in physical
form along with the e-TDS return furnished in CD/floppy. Form 27A is a summary of TDS return
(Form 24, 26 or 27), which contains control totals of Amount Paid and Income tax deducted at
source. The control totals mentioned on Form 27A should match with the corresponding control
totals in e-TDS return file. Form 27A is required to be furnished separately for each TDS return
(Form 24, 26 or 27).
The deductors / collectors preparing e-TDS returns are required to validate their returns with the
File Validation Utility (a freely downloadable utility developed by NSDL), to conform to the pre-
scribed format.
In Tally.ERP 9, the eReturn menu displays the eTDS Quarterly/ Annual Forms, which can be
exported and validated with the File Validation Utility.
To view the E-TDS Forms
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > E–Return > E–TDS
In our examples, we have not considered payments made to Non-residents.
Hence, the Form 27Q, Form 27 and Annexure to Form 27Q will appear
blank.

161
Figure 18.115 E-TDS Forms
Form 26Q
Form 26Q is a Quarterly return for deduction of tax in respect of payments made to residents
other than salary. To export Form 26Q
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > E-Return > E-TDS >
Form 26Q
In Exporting eTDS Form, press Backspace and enter the following details
By default, the Language and Format is preset as Restricted (ASCII Only) and SDF
(Fixed Width) respectively.
In Export Location field enter the details of the path to where the txt file to be exported.
In the Output File Name field specify the file name as Form 26Q.txt
Press Enter to accept the Person Responsible Details (The Address details are auto-
matically defaulted from the Company masters in the Person Responsible Details col-
umn)
Select Yes or No as applicable, in Is Change in Address since last Return field.
Under Other Details, In Category (deductor/Collector) field select the Deductor Cat-
egory and specify the applicable date in the From and To fields
Specify 30-06-2009 in the Challan Date Till field (i.e., Challan date to be considered for
TDS payments made for the respective quarter/period)
In Form Name field, Form 26Q is defaulted
Specify the Place and Date of Filing Returns

162
The Exporting eTDS Forms configuration screen appears as shown
Figure 18.116 Exporting eTDS Forms
Press Enter to Export Quarterly Return in 26Q
The exported file is placed in the Tally.ERP 9 Directory with the file name as specified above.
Figure 18.117 Exported Form 26Q in Tally.ERP 9 Directory

163
The exported file (Form 26Q) is required to be validated with the File Validation Utility (a freely
downloadable utility from NSDL website) and after validation, the returns should be submitted to
the department in CD along with Form 27A in Physical Form.
Print Form 27A
Form 27A is a summary of TDS return which contains control totals of Amount paid and Income
tax deducted at source. Form 27A is to be filed in physical form with each return i.e., Form 26Q,
Form 27 Q, Form 26 and Form 27.
In case of returns submitted in the paper form, form 27A need not be attached. Follow the steps
given below to print Form 27A
Go to Gateway of Tally > Display >Statutory Reports > TDS Reports > E–Return > Print
Form 27A
In the Printing TDS Form 27A screen,
Press Enter to accept the Person Responsible Details
Under Other Details, specify the following
Select the Deductor Category in Category (deductor/Collector) field.
Enter the applicable date in the From and To fields
Specify 30-06-2009 in the Challan Date Till field
Select the Enclosed Form Type as Form 26Q
Specify Previous Receipt No., if any
Specify 1 in the No. of Annexures enclosed field
Specify Other Information, if any
Specify the Place and Date of filing returns
The completed Printing TDS Form 27A configuration screen is displayed as shown.
It is mandatory to validate the TDS returns with File Validation Utility
to confirm to the requirements as prescribed by the Income tax depart-
ment. In case of any errors in exported file (Returns), the FVU prompts
a error message with error code, the assessee may correct the same
and revalidate the returns (The File Validation Utility is available for
Quarterly and Annual returns separately).
Tally.ERP 9 exports both Form 26Q & Form 27Q in the text (.txt)
format as prescribed by NSDL.

164
Figure 18.118 Printing TDS Form 27A
Press Enter to Print Form 27A
The printed Form 27A is displayed as shown.

165
Figure 18.119 Printed Form 27A
Form 27Q
Form 27Q is a Quarterly return for deduction of tax in respect of payments made to non-
residents other than salary.
To Export Form 27Q
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > E–Return > E–TDS >
Form 27Q
In Exporting TDS Form 27Q, press Backspace and enter the required details

166
Figure 18.120 Exporting eTDS Forms
Press Enter to Print Form 27Q.
18.5.5 Outstandings
In Tally.ERP 9, you can generate TDS outstandings on the following
TDS Payables
Ledgerwise TDS Payable
Nature of Payment
TDS Not Deducted
TDS payables
The TDS Payables report gives you information on the TDS payable (pending) to Government
for a particular Nature of Payment.
To view TDS Payables report,
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Outstanding > TDS
Payables

167
Figure 18.121 TDS Payable Report
Press Alt+F1 or click on F1: Detailed to view in detailed mode
To Print TDS Payables report, press Alt+P from the above screen.
The printed TDS Payables report appears as shown :
Figure 18.122 Print Preview – TDS Payable Report

168
Ledger
TDS Ledger Outstandings report displays ledger wise TDS outstandings. This report can be
viewed for all the ledgers or for one ledger.
Figure 18.123 Ledger Menu
Select All Items, to view Ledger Outstandings for all the ledgers
The TDS Ledger Outstandings report appears as shown

169
Figure 18.124 TDS Ledger Outstandings – All Items
Select One Item, to view TDS Ledger Outstandings for particular ledger
Select Ramesh Kumar and press Enter to view TDS Ledger Outstandings Report

170
Figure 18.125 TDS Ledger Outstandings – One Item
Nature of Payment
TDS Nature of Payment Outstandings report displays Nature of Payment wise TDS outstandings.
This report can be viewed for all the Nature of Payment or for one Nature of Payments.

171
Figure 18.126 Nature of Payment
Select All Items, to view Nature of Payment Outstandings for all the Nature of Payment
The TDS Nature of Payment Outstandings report is dispayed as shown
Figure 18.127 TDS Nature of Payment Outstandings – All Item

172
Select One Item, to view TDS Nature of Payment Outstandings for Particular Nature of
Payment
From the List of TDS Nature of Payments, select Commission Or Brokerage
Press Enter to view TDS Nature of Payment Outstandings report
Figure 18.128 TDS Nature of Payment Outstandings – One Item
TDS Not Deducted
The TDS Not Deducted report displays party wise information on the Amount subject to TDS, Tax
to be Deducted on such amount, Tax Deducted till date and Balance to be deducted i.e., Not
deducted (if any).
To view the TDS Not Deducted report,
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Outstandings > TDS
Not Deducted

173
Press F7 (Show All) to display all transactions
Figure 18.129 TDS Not Deducted Report
Press Alt+F1 or click on F1: Detailed to view in detailed mode
In our case study (National Enterprises), the TDS Not Deducted Report
will be blank, since TDS is deducted on all the transactions. In such cases,
you may press F7 to display all TDS related transactions.

174
Figure 18.130 Detailed TDS Not Deducted Report
To Print TDS Payables report, press Alt+P from the above screen.
18.5.6 Exception Reports
In Tally.ERP 9, you can generate various TDS exception reports to help track and rectify any dis-
crepancies in TDS entries. Tally.ERP 9 allows you to generate exception reports to track Migrated
Vouchers, Migrated Bills, TDS Masters with advanced configuration, Migrates TDS Vouchers,
TDS Masters without PAN Details and TDS Masters without deductee Type.
To view TDS Exception Reports
Go to Gateway of Tally > Display> Statutory Reports > TDS Reports > Exception Reports

175
Figure 18.131 Exception Reports
PAN Not Available
The PAN Not Available report displays all the Party Ledgers for whom the PAN details is not
available. To view the PAN Not Available report.
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Exception Reports >
PAN Not Available
For eg., create ledger Nikhil Computers without providing PAN / IT No.. The PAN Not Available
report will appear as shown :

176
Figure 18.132 PAN Not Available
You can also update the PAN Details of the Party from the above screen. This report is useful in
tracking the party ledgers for which the PAN Details are not available before filing the e-returns.
Unknown Deductee Type
The Unknown Deductee Type report displays all the Party Ledgers for whom the Deductee Type
is not defined.
To view the Unknown Deductee Type report
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports> Exception Reports >
Unknown Deductee Type
For eg., create ledger Somitel Communication without selecting Deductee Type

177
Figure 18.133 Unknown Deductee Type
You can also update the Deductee Type Details of the Party from the above screen. This report is
useful in tracking the party ledgers for which the Deductee Type Details are not available before
filing the e-returns.
Migrate Tool
The Migrate Tool comprises of the following reports
Track Migrate Voucher : The Track Migrate Vouchers reports displays Date-wise
Migrated and Non-migrated vouchers. Tally.ERP 9 displays the Non Migrated vouchers'
Amount in Bold for easy identification.
Track Migrate Bills : The Track Migrate Bills report displays Tax bill name wise migrated
and non-migrated voucher. In this report, you can identify migrated/non- migrated vouchers
by comparing the previous deduction amount and new deduction amount and previous
payment amount and new payment amount are same. If the Deduction Amounts (Previous
and New) and Payment Amounts (Previous and New) are same then, it is understood that

178
the vouchers are successfully migrated. On the other hand, if the Deduction Amounts (Pre-
vious and New) and Payment Amounts (Previous and New) are not same then it is under-
stood that the vouchers are not migrated.
Track Masters : The Track Masters Report displays TDS Ledger wise Lower Deduction,
Zero Deduction and IT Exemption details.
Re-Migrate : The Re-Migrate option, first un-migrates all the TDS vouchers and then re-
migrates all the vouchers. If the migration is not complete then the application displays the
message - TDS Migration did not complete sucessfully. If the migration is complete you
can continue to record TDS transactions and generate required reports.

179
Points to Remember
Tax Deducted at Source is one of the modes of collecting income tax.
The buyer/service and receiver/payer of income files annual returns
electronically or in physical form.
Tax Assessment Number is a ten-digit alphanumeric number issued by
the Income Tax Department to the deductor.
The Statutory Masters are of two types Deductee Type and Nature of
Payments.
Tally gives you the option of booking of expenses either using a journal
voucher or a purchase voucher.
Tax transactions for a particular party providing services is recorded in a
journal voucher using the TDS Deduction button.
TDS payment is done in two ways - Manual bill selection and Auto-fill
selection (using TDS Helper).
TDS payment voucher is printed as a TDS Challan.
The TDS amount on advance payments is adjusted only when the final
settlement of accounts for a contract is made.
The TDS Computation Report provides you with a list of party and TDS
Ledger names for which the TDS bills are deducted.
TDS Payables Report gives the status of TDS payable (pending)
amounts for a particular TDS Ledger account.
Ledger Outstandings Report is used to find out the outstanding status of
a particular tax ledger account.
The reconciliation of challan payments made to the Bank for TDS
accounts is done in the Ledger Voucher Report.

18 tax deducted at source

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18 tax deducted at source