slide 1;TDS DEDUCTION IN TALLY PRIME Slide 2 INTRODUCTION OF TDS TDS full form stands for Tax Deducted at Source. It is the tax amount deducted by the employer from the taxpayer which is deposited to the IT Department on behalf of the taxpayer. It is a certain percentage of one's monthly income which is taxed from the point of payment. Rates vary based on vendor type, payment amount etc as specified under IT Act Slide 3 WHY MANAGE TDS? Legal compliance Avoid penalties and interest Adjust TDS against final tax liability Slide 4 TDS Setup in Tally Enable TDS Feature Go to F11 > Features > Statutory Features > Set/Alter Features and set "Enable TDS" to Yes Slide 5 Key things Correctly set up tax codes Link TDS ledger while invoicing Capture deductee details

1. TDS DEDUCTION IN
TALLY PRIME
Streamlining Tax Deduction at
Source

2. INTRODUCTION OF TDS
• TDS full form stands for Tax Deducted at Source.
• It is the tax amount deducted by the employer from the
taxpayer which is deposited to the IT Department on behalf
of the taxpayer.
• It is a certain percentage of one's monthly income which is
taxed from the point of payment.
• Rates vary based on vendor type, payment amount etc as
specified under IT Act

3. WHY MANAGE TDS?
• Legal compliance
• Avoid penalties and interest
• Adjust TDS against final tax liability

6. Enable TDS
Feature Set TDS Deatils
TDS Setup in Tally
• Enable TDS Feature Go to F11 > Features > Statutory Features > Set/Alter
Features and set "Enable TDS" to Yes

7. Create TDS Vouchers
• Create TDS Tax Code Go to Gateway of Tally > Accounts Info >
Ledgers > Create. Select TDS/TCS Tax Code as type of ledger. Enter
details like Section Code, Tax Name, Effective Rate etc.

8. TDS Deductee Ledger
Go to Gateway of Tally > Accounts Info > Ledgers > Create. Select Sundry Debtors/Sundry Creditors as
type and enter party details.

9. Record TDS Voucher
Go to Gateway of Tally > Accounting Vouchers > F7 Journal Voucher Select party
ledger, enter amount. TDS will be calculated and deducted automatically when you
select TDS Tax Code ledger.

10. Example
Here is an example of TDS in Tally Prime with voucher entries:
Made a payment of Rs 50,000 to Mr. Ramesh for certain contract services. TDS to be deducted at 10%
Enable TDS Feature Go to F11 > Features > Statutory Features > Set/Alter
Features and set "Enable TDS" to Yes

11. Create TDS Tax Code Go to Gateway of Tally > Accounts Info > Ledgers > Create.
Select TDS Tax Code as type of ledger. Enter details like Section Code, Tax Name, Effective Rate etc.

12. Create TDS Deductee Ledger Go to Gateway of Tally >
Accounts Info > Ledgers > Create. Select Sundry
Debtors/Sundry Creditors as type and enter party details.

13. Create Contract Fee Ledger Go to Gateway of Tally > Accounts Info >
Ledgers > Create. Select Indirect Expenses

14. Create TDS on Fee Ledger Go to Gateway of Tally > Accounts Info >
Ledgers > Create. Select Duties and Taxes

15. Pass the Voucher Entry in Journal voucher:
In TallyPrime, the TDS will be calculated and posted to the TDS ledger automatically
on applying the 194C Contractors TDS tax code rate.

16. Key things:
• Correctly set up tax codes
• Link TDS ledger while invoicing
•Capture deductee details