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Creating Provision for Expenses & Accounting for it [TDS] in Tally.ERP9

Journal Voucher

Let us record a journal voucher for the year-end transaction of booking expenses incurred in the current year and payable in the next year by deducting TDS.

  • Create a provision entry for audit fee of  75,000 payable on audit conducted by Mark Audit Solutions in 2012-13.

  • Record a journal voucher or purchase invoice on receipt of invoice from Mark Audit Solutions in 2013-14 against the provision entry booked in the year 2012-13 for the audit fees.

To record these transaction, the following three ledgers need to be created.

  1.  Audit Fees

  • Group: Indirect Expenses

  • Is TDS Applicable: Yes

  • Default Nature of Payment: Any

  1.  Audit Fees Payable

  • Group: Provisions

  • Is TDS Deductable: Yes

  • Treat as TDS Expenses: Yes

  • Default Nature of Payment: Any

  1. TDS on Audit Fees

  • Group: Duties & Taxes

  • Type of Duty/Tax: TDS

  • Nature of Payment: Fees for Professional Or Technical Services

  1. Mark Audit Solutions

  • Group: Sundry Creditors

  • Is TDS Deductable: Yes

  • Deductee Type: Company - Resident

  • Under Tax Information section, enter the PAN / IT Number

Provision Entry in Journal Voucher

Journal Voucher

Record a journal voucher on 30th March 2013, to create a provision entry for  75,000 payable towards audit fees.

Go to Gateway of Tally > Accounting Vouchers > F7: Journal

Debit the Audit fees ledger and enter  75,000 in the Amount field. In the Nature of Payment column, select Not Applicable.


Credit the Audit Fees Payable ledger and the amount will be automatically displayed.


Press Y or Enter to accept the journal voucher.

Create a Journal Voucher for Provision Entry

To record an entry in journal voucher with ledger grouped under Provisions,

Go to Gateway of Tally > Accounting Vouchers > F7: Journal

Debit the Audit Fees Payable ledger and enter  75,000 in the Amount field. Set the Nature of Payment to Fees for Professional Or Technical Services.

Credit the party ledger, Mark Audit Solutions. In the TDS Details screen, select the Type of Ref as New Ref and select the TDS ledger - Tax on Audit Fees. Enter the amount as  67,500.

Credit the TDS on Audit Fees ledger. The amount appears automatically.


Press Y or Enter to accept the Journal Voucher.

Create a Purchase Invoice for TDS

Until now, the Provision entry was supported only through Journal Voucher. In Tally.ERP 9 Series A Release 4.8, the facility is provided to record the provision entry in Purchase Voucher as well.

The facility is now provided to select ledger grouped under Provisions in purchase invoice. Let us record a purchase invoice to record the transaction shown in 'Create a Journal Voucher for Provision Entry' section.

Go to Gateway of Tally > Accounting Vouchers > F9: Purchase > Create

Click F12: Configure and set the option - Allow Provision in Purchase Voucher to Yes. Enabling this option will allow you to select the ledgers grouped under Provisions in purchase invoice.


Note: The option - Allow Provision in Purchase Voucher is also provided in Invoice / Orders Entry configuration when navigated from Gateway of Tally > F12: Configuration.

Depending on the transaction being created, you can record the entry in Accounting Invoice or Item Invoice mode. In this example, record the entry in Accounting Invoice mode (click Alt+I: Acct Invoice button if the screen is displaying item invoice mode).

  1. Enter the invoice date as 8-5-2013.

  2. Enter the Supplier Invoice number and date.

  3. In Party's Ledger A/c select Mark Audit Solutions.

  4. Under Particulars, select Audit Fees Payable ledger and enter the amount as  75,000. The Nature of Payment appears as defined in the ledger master.


  1. Select TDS on Audit Fees ledger. In the TDS Details screen, select New Ref. The details will be captured automatically.


  1. In the Bill-wise Allocation screen, select New Ref for both the references. The amount will be captured automatically.


  1. The Purchase Invoice displays as shown:


  1. Press Y or Enter to accept and save.

Tally.ERP 9 Reference Manual LIBRARY
Installation of Tally.ERP9
Site Licensing of Tally.ERP9
Shortcut Keys in Tally.ERP9
Maintaining Company Data
Creating Masters
5a. Accounts Information [Creating Masters]
5b. Inventory Information [Creating Masters]
Voucher Entry
Reports in Tally.ERP9
Excise for Dealer
Excise for Manufacturer
Reports [ Excise for Manufacturer]
Excise for Importer
Service Tax in Tally.ERP9
Tax Collected at Source (TCS) in Tally.ERP9
Tax Deducted at Source (TDS) in Tally.ERP9
Value Added Tax (VAT) in Tally.ERP9
Central Sales Tax (CST) in Tally.ERP9
GST using Tally.ERP9
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