Tax Deducted at Source (TDS) – FAQs (Frequently Asked Questions)

1. Query 

Can I have a common expense ledger for multiple ‘Nature of Payment’ of TDS?

Answer

Yes, in Tally.ERP 9 TDS you can create a common expense ledger for ‘multiple Nature of Payments’.

Can I have a common TDS deduction duty ledger for multiple ‘Nature of Payments’?

 Answer

Yes, you can have a common TDS deduction duty ledger for multiple ‘Nature of Payments’.

Can I deduct TDS while booking an expense in the same voucher?

Answer

Yes, in Tally.ERP 9 you can deduct TDS while booking an expense in the same voucher.

Can I deduct TDS in a single voucher for bookings of whole month?

Answer

Yes, you can deduct TDS in single voucher for multiple bookings. 

5. Query

Can I deduct TDS in single deduction voucher for multiple ‘Nature of Payment’?

Answer

Yes, in Tally.ERP 9 you can deduct TDS in a single voucher for multiple ‘Nature of Payment’.

Can I deduct TDS on expenses which are partially applicable for TDS deduction?

Answer

Yes, in Tally.ERP 9 you can deduct TDS on the applicable value.

How does Tally.ERP 9 handle Surcharge Calculation?

Answer

Surcharge calculation will be retrospective. For example after crossing the surcharge exemption limit, the surcharge should be calculated on all the vouchers from the beginning of the financial year.

Does Tally.ERP 9 handle Lower / Zero Rate?

Answer

Yes, Tally.ERP 9 does handle a Lower / Zero Rate by configuring it at the party level.

Can I deduct TDS on advance payments?

Answer

Yes, in Tally.ERP 9 you can deduct TDS on advance payments.

Do you handle TDS deduction for Non-Resident (Sec.195)?

Answer

Yes, in Tally.ERP 9 you can deduct TDS for Non- Resident (Sec.195).

Can I reverse deducted TDS?

Answer

Yes, you can reverse the deducted TDS in Tally.ERP 9.

Is it possible to print TDS Challan from the TDS payment entry?

Answer

Yes, you can print TDS Challans (ITNS 281).  

What about Form 16A?

Answer

In Tally.ERP 9 you can print category-wise Form 16A for a party.

Can I print Form 16A for all parties in one command?

Answer

Yes, in Tally.ERP 9 you can print Form 16A category-wise for all the parties through a single command.

Does Tally.ERP 9 TDS support e-TDS filing?

Answer

Yes, in Tally.ERP 9 TDS, you can generate returns for filing e-TDS. 

Can I print e-TDS Reports?

 Answer

Yes, in Tally.ERP 9 TDS you can print Forms 26, 26Q, 27, 27Q with their Annexure(s).

17. Query

Payment made towards services purchased after deducting TDS; Input Credit report dispalys the details as - Service Tax is being calculated on the net amount excluding TDS.

Answer

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

1. Book the Expenses and Service Tax through Purchase Voucher as shown

2. Deduct TDS in a separate Journal Voucher using of Alt + S: TDS Deduction 

3. Make the Payment to party

4. Check the Service-Tax Input credit Form -report displays the realised value & total credit as shown below

For detailed procedure on how to record the transaction to calculate TDS and Service Tax on appropriate amount refer How to Calculate Service Tax on total transaction amount including TDS ?

18. Query

Exported e-TDS file from Tally.ERP 9. In the exported file only the details of one section (Section 94C) are available. The information of other nature of payments is not getting exported to e-TDS file, why?

Answer

Check the TDS payment entries. If Multiple TDS duty ledgers are selected (e.g. TDS on Contract, TDS on Rent, TDS on Profession) in the payment entry, then the exported e-TDS file may not have the information of all the duty ledgers selected.

As you know, in TDS Challan ITNS 281 the section code of the Nature of Payment gets captured based on the TDS Duty ledger selected in the payment voucher. So it is always suggested to make separate payments for different Nature of Payments (TDS Duty Ledgers).

In case, If Multiple TDS Duty ledgers are selected in a single TDS payment entry then the section code of the first TDS Duty ledger selected in the payment voucher will be captured in TDS Challan ITNS 281 irrespective of any number of duty ledgers selected in the TDS payment voucher.

19. Query

Even after enabling the option Set/Alter TDS Details from F11: Features > F3: Statutory & Taxation, Set/Alter TDS Details option gets changed to No.

TDS Migrated Data - FAQs

20. Query

Migrated Tally 9 data to Tally.ERP 9. In Printing Form 16A screen unable to select TDS category (TDS Nature of payment list is not displayed).

Answer

Check whether all the TDS vouchers have got migrated to Tally.ERP 9. If the TDS vouchers are not migrated, then in Form 16A the Nature of Payments will not be listed for selection. Refer the TDS Data migration process

21. Query

After migrating the data in Tally.ERP 9 unable to print TDS Challan.

Answer

Check whether all the TDS vouchers have got migrated to Tally.ERP9. If TDS migration is not complete then it is not possible to print TDS Challan.

Query

In the Migrated data, TDS Balance Deductable report (drill down report of the option Balance Deductable in TDS Computation) is displaying Negative Values.

Answer

TDS Balance Dedcutable Report will display negative balance when:

1. TDS is deducted for the party with out considering the Income Tax Exemption Limit 

2. In the Party ledger Alter Ignore Income Tax Exemption Limit is not set to Yes after migrating the data to Tally.ERP 9.

Identify the party for whom the negative values are displayed and alter the party ledger as given below

a) Enable ADVANCED entries in TDS Master in F12: Configure

b) Set the option Use Advanced TDS Entries to Yes

c) In Advanced TDS Entries screen Set the option Alter Ignore Income Tax Exemption Limit to Yes

d) Select all/appropriate TDS Nature of Payment

22. Query

Customer has recorded and deducted TDS on expenses (with item) in purchase invoice, will these types of TDS transactions will get migrated to Tally.ERP 9?

Answer

Yes, these transactions will get migrated to Tally.ERP 9.

23. Query

In Tally.ERP 9 Expenses are booked for the party. But in the TDS deduction entry party name is not listed (displayed) for selection. Why?

Answer

As per law TDS is necessary only when the payment to the Assessee exceeds the Income Tax (IT) exemption limit. If the total payment to the party does not exceed the IT exemption limit, application will not display the party name in the TDS deduction entry.

However if you want to deduct TDS for a assessee even when the total payment has not crossed the IT exemption limit, Alter the party ledger as given below

a) Enable ADVANCED entries in TDS Master in F12: Configure

b) Set the option Use Advanced TDS Entries to Yes

c) In Advanced TDS Entries screen set the option Alter Ignore Income Tax Exemption Limit to Yes

d) Select all/appropriate TDS Nature of Payment

24. Query

In Migrated data TDS Balance Deductable report (drill down report of the option Balance Deductable in TDS Computation) is displaying Negative Values.

Answer

In migrated data TDS Balance deductable report will display negative balance if TDS is is Deducted for the party with out considering the Income Tax Exemption Limit and after migration in Tally.ERP 9 for that party Alter Ignore Income Tax Exemption Limit option is not set to Yes.

To rectify the data, identify the party for whom the negative values are displayed and alter the party ledger as given below

a) Enable ADVANCED entries in TDS Master in F12: Configure

b) Set the option Use Advanced TDS Entries to Yes

c) In Advanced TDS Entries screen set the option Alter Ignore Income Tax Exemption Limit to Yes

d) Select all/appropriate TDS Nature of Payment

How to enable TDS in Tally.ERP 9?

Answer

From Gateway of Tally > Press F11> Press F3 or Statutory &Taxation > Set the option enable Tax Deducted at Source to “Yes” .

• Set the option Set /Alter TDS Details to “Yes” . TDS Deductor Details will appear
• Mention the Deductor Details of the company and save

Note: In the Deductor Details screen the Deductor Type should be selected depending upon the Organisation Type, if the customer is not aware of Deductee Type suggest him to contact his Tax Consultant.

For more details on Enabling TDS refer  How to Enable TDS in Tally.ERP 9?

What are the ledgers need to be created to record TDS transactions?

Answer 

• Party Ledger > Under Sundry Creditors > enable the option is TDS Deductable to “Yes” and select the applicable Deductee Type
• Expense Ledger > Under Indirect Expense >enable the option Is TDS Applicable set to “Yes” and select required Default Nature of Payment
• TDS Ledger (Tax Ledger) > under Duties and Taxes > select the Type of Duty as - TDS > Select the required Default Nature of Payment
• Bank Ledger > Under Bank Accounts  

Go to Party Ledger alteration screen > press F12: Configure> enable the option Allow Advance entries in TDS masters set to “Yes” and save.

• In the Party Ledger alteration screen enable the option Use Advance TDS entries to Yes 
• Set “NO” to Ignore Surcharge Exemption Limit 
• Check by recording a TDS transaction.

Even after setting the option Ignore Surcharge Exemption Limit to 'No' in Party Ledger still Surcharge is getting calculated. Why?

Answer

On crossing the exemption limit, surcharge will get calculated automatically even if the option Ignore surcharge Exemption Limit is set to “No” in party ledger.

TDS amount is getting deducted even when TDS Exemption limit is applicable to the party. Why it TDS is getting Deducted  and how to correct?

Answer

TDS will be deducted even when the TDS Exemption Limit is not crossed if the option Alter Ignore Income Tax Exemption Limit under Use Advance TDS Entries is enabled in the Party Ledger. To rectify this

Go to Party Ledger alteration screen > press F12: Configure > enable the option Allow Advance entries in TDS Masters set to “Yes” and save.

• In the Party Ledger alteration screen enable the option Use Advance TDS Entries to Yes 
• Set “NO” to Alter Ignore Income Tax Exemption Limit 
• check by recording a TDS transaction

How to Deduct TDS at Lower Rate?

Answer

Go to Party Ledger alteration screen > press F12: Configure > enable the option Allow Advance entries in TDS Masters set to “Yes” and save.

• In the Party Ledger alteration screen enable the option Use Advance TDS Entries to Yes.
  Set the option Alter Zero/ Lower Deduction to Yes > Select the Nature of Payment for which the Lower rate is applicable > select the Lower Rate deduction Section Number and other required information and save the ledger alteration.
• Check by recording a TDS transaction.

31. Query  

Party Ledger is configured for Lower deduction. Is it possible to alter the TDS rate while recording the entry? Is it possible to alter the TDS rates even when I have multiple Nature of Payments?

Answer

Yes, it is possible to alter the TDS rate while recording the transaction and even when you have multiple Nature of Payments. 

In Journal Voucher > Press F12: Configure > set the option Allow Alteration of  TDS Rates for Lower Deduction to Yes. Tally.ERP 9 allows to alter TDS rates in TDS Details screen.

32. Query

Can I deduct TDS while booking the expense without asking the confirmation for TDS deduction  in the same vocuher or not?

Answer 

Yes, it is possible. To deduct TDS without confirmation  

Go to Party Ledger alteration screen > press F12: Configure > enable the option Allow Advance entries in TDS Masters set to “Yes” and save.

• In the Party Ledger alteration screen enable the option Use Advance TDS Entries to Yes.
• Set the option Deduct TDS in Same Voucher If Applicable to Yes > Select the Nature of Payment for deduction of TDS in the same Voucher and save the ledger alteration.
• Check by recording a TDS transaction.