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How to Calculate TDS on total transaction amount including Service Tax?  (Knowledgebase) @ Tally.ERP9


How to Calculate TDS on total transaction amount including Service Tax ?


For the accurate calculation of Service Tax and TDS follow the given steps

Step 1: Create the Expense Ledger by enabling TDS and Service Tax

As on this Expenses both Service Tax & TDS is applicable it is must to enable TDS & Service Tax feature by selecting the appropriate Service Category and TDS Nature of Payment.

Go to Gateway of Tally > Accounts Info. > Ledgers > Create

Create the Expense Ledger by enabling TDS and Service Tax in Tally.ERP9

Step 2: Create TDS Ledger

Create the TDS ledger as shown below

Create TDS Ledger in Tally.ERP9

Step 3: Create Service Tax Ledgers

Service Tax Ledger 

Create Service Tax Ledgers in Tally.ERP9
Education Cess Ledger
Education Cess Ledger in Tally.ERP9
Secondary Education Cess Ledger
Secondary Education Cess Ledger in Tally.ERP9

Step 4:  Book the Expenses, Deduct TDS and Calculate Service Tax through Purchase Voucher

1. Select the expenses ledger - Professional Charges and enter the Service Details in Service Tax Details screen

2. In Service Tax Details screen enter the Service Amount of Rs. 75,000 to calculate Service Tax.

Service Tax Details for Professional Charges in Tally.ERP9
3. Allocate the entire amount of Service to the applicable TDS Nature of Payment
TDS Nature of Payment in Tally.ERP9

Note: nature of payment screen will display only when the option Allow Alteration of TDS Nature of payment in Expenses is set to Yes in F12: Configurations.

4. Select service tax ledger - Service tax @ 10% to calculate the Service Amount on the services and press enter to view the TDS Nature of Payment screen. In this screen by default the TDS Nature of Payment selected in the Expenses ledger will be displayed. Accept the default screen.

TDS Nature of Payment in Tally.ERP9

Note: TDS will be deducted even on the Service tax amount.

5. Select Education cess ledger - Education Cess @ 2% to calculate Education Cess amount. Accept the default TDS Nature of Payment screen

6. Select Secondary Education Cess ledger - Secondary Education Cess @ 1% to calculate Secondary Education cess amount. Accept the default TDS Nature of Payment screen

Note: In this case we have 3 different ledger to account different components (Service Tax, Education Cess and Secondary education Cess) of Service Tax. You can use single ledger to account tax of all the components. To know how to create single ledger please refer the topic Common Service Tax Ledger

7. Select TDS ledger - TDS- Professional Services to view the TDS Details screen. TDS Details screen displays the reference, bill name, Nature of payment Assessable Value (Service Amount + Service Tax Amount) with the TDS Amount.

TDS Nature of Payment in Tally.ERP9

Observe TDS amount will be displayed with negative sign

8. Provide the Bill Details as shown

Bill-wise Details for Service Tax Ledger in Tally.ERP9
9. On accepting the Bill-wise Details screen Tally.ERP 9 displays Service Tax Realisation for TDS Deducted Amount screen
Service Tax Realisation for TDS Deducted Amount screen in Tally.ERP9
If you want to consider the TDS deducted amount as the Realised amount for Service Tax Bill you can select the Category. Based on the Category selected the ServiceAmount Inclusive of tax and the TDS portion which is considered as realised will be displayed along with Service Tax on Realised amount of Rs. 8273
Service Tax Realisation for TDS Deducted Amount in Tally.ERP9

In this case ABC Company has considered TDS Deducted as the Realised amount towards the Service Bill, hence they have selected the category and Service tax has calculatedon the realised amount.

If you don't want to consider the TDS amount as realised, then in Service Tax Realisation for TDS Deducted Amount screen select Not Applicable in Category field.

The completed Purchase Voucher is displayed as shown

tally erp 9 software download

10. Press Enter to save.

Input Credit Summary Report

 If the TDS amount is set as Realised, to the extent of Realised amount the Input Credit will be available to assessee and details will be updated in the Input Credit Summary Report. To check

Go to Gateway of Tally > Display > Statutory Reports > Service Tax Reports > Input Credit Summary

Input Credit Summary Report in Tally.ERP9
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