Is it possible to
account Advance payments to party and deduct TDS on
such advances? How to adjust the advances paid to the party towards the
Example: On 15-04-2010, ABC Company made an advance payment of Rs.50,000 to Pheonix Agencies towards
Advertisement Expenses. While making payment tax was deducted form the Source. Advances were adjusted towards
the bill of Rs.2,00,000 dated 26-04-2010.
Tally.ERP 9 allows accounting advance payments to party and deduct
TDS on the advances and later adjust the advance paid towards the Bill.
Follow the given procedure to account advances
and adjust the advances towards the Bill
Step 1: Record a Payment Voucher (to account advances)
To create a Payment Voucher
Go to Gateway of
Tally > Accounting Vouchers > F5: Payment.
In F12: configure
1. In Account field select the Bank Ledger. E.g. Canara Bank
2. Under Particulars select the party ledger Pheonix Agencies. In Amount field enter the amount paid as advance and press
enter to view Bill-wise Details screen
3. In Bill-wise
4. Accept the Bill-wise
5. Under Particulars select tax ledger, TDS - Contractor and press enter to view TDS Details screen
TDS Details screen appears as shown
Press Enter to accept the TDS Details. Tax
deducted will be displayed with negative sign.
completed Payment Voucher is displayed as shown
7. Press Enter to save.
Step 2: Record a Journal Voucher (to account the bill &
adjust the advances)
To account the bill
received and adjustment of advances paid
Go to Gateway of
Tally > Accounting Vouchers > F7: Journal
1. In Debit field select the expenses ledger - Advertisement
Expenses. In Debit amount field enter the total bill amount of Rs. 2,00,000
2. In Credit field select the Party Ledger - Pheonix Agencies. Press Enter to view TDS Details screen
3. In TDS Details screen
The completed TDS
Details screen is displayed as shown
Observe, the advance of Rs. 50,000 is adjusted towards the bill and TDS is calculated only on the balance
amount of Rs. 1,50,000.
4. In Bill-wise
Details screen select the bill
reference as shown
5. In Credit field select the TDS ledger TDS- Contractor. Tax deducted - Rs. 3,000 (on 1,50,000) will be
The completed journal
voucher is displayed as shown
Press Enter to save.
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