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TDS on Work Contracts [TDS] in Tally.ERP9

Works Contracts, on Which VAT, Service Tax and TDS are applicable can be recorded in Tally.ERP 9. Works Contract transactions can be recorded in Purchase Voucher (Account Invoice Mode)

Example: On 10-10-2009 ABC Company received Bill -0052 from  Shreya Builders & Developers for Rs. 58,384.80 for the given Work Contract.

In the above transaction - Purchase Cost of the Work Contract is Rs.54000, VAT is @ 4%, Service Tax @ 4.12%. On the Total Amount - TDS @ 1% to be Deducted.

Follow the given steps to record the transaction

Step 1: Create Masters

  1. Party Ledger (supplier)

  2. Purchase Ledger

  3. VAT Ledger

  4. Service Tax Ledger

  5. TDS Ledger

Step 2: Record a Purchase Voucher (Book the Work Contract Purchases)

Step 1: Create Masters

1. Party Ledger

  • Enter the Name of the Party Ledger e.g. Shreya Builders & Developers

  • Select Sundry Creditors from the List of Groups in the Under field.

  • Set Maintain balances bill-by-bill to Yes.

  • Enter the Default Credit Period, if required.

  • Set Is Service Tax Applicable to Yes. Select Not Applicable in Exemption Details screen

  • Set Is TDS Deductable to Yes.

  • In the Deductee Type field, select Company-Resident from the List of Deductee Type

  • Enter Mailing and Tax Information

  • Press Enter to save

2. Purchase Ledger

  • Enter the Name of the Purchase Ledger e.g. Works Contract Purchase

  • Select Purchase Accounts from the List of Groups in the Under field.

  • Set Is Service Tax Applicable to Yes. Select Works Contract Service in Category Name screen.

  • Set Is Abatement Applicable to No

  •  Set Used in VAT Returns to Yes. Select Purchases @ 4% in VAT/Tax Class screen

  • Set Is TDS Deductable to Yes.

  • Select Payment to Sub-Contractors in Default Nature of Payment field

  • Set Use for Assessable Value Calculation to No

  • Press Enter to save

3. VAT Ledger

  • Enter the Name of the VAT Ledger e.g. Input VAT @ 4%

  • Select Duties & Taxes from the List of Groups in the Under field.

  • In Type of Duty/Tax field select tax type as VAT

  • In VAT/Tax Class field select the VAT class as Input VAT @ 4%

  • Set Is TDS Deductable to Yes.

  • Select Payment to Sub-Contractors in Default Nature of Payment field

  • Press Enter to save

4. Service Tax Ledger

  • Enter the Name of the Service Tax Ledger e.g. Input Service Tax- Works Contract  @ 4%

  • Select Duties & Taxes from the List of Groups in the Under field.

  • In Type of Duty/Tax field select tax type as Service Tax

  • In Category Name field select the Service Category - Works Contract Service

  • Set Is TDS Deductable to Yes.

  • Select Payment to Sub-Contractors in Default Nature of Payment field

  • Press Enter to save

5. TDS Ledger

  • Enter the Name of the TDS Ledger e.g. TDS- Works Contracts

  • Select Duties & Taxes from the List of Groups in the Under field.

  • In Type of Duty/Tax field select tax type as TDS

  • Select Payment to Sub-Contractors in Nature of Payment field

  • Press Enter to save

Step 2: Record a Purchase Voucher (Book the Work Contract Purchases)

To create Purchase Voucher

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

Set Up:

In F12: Configuration

  • Set Use Common Ledger A/c for Item Allocation is set to No

  • Set Use Defaults for Bill Allocations to No

  • Set Allow Alteration of TDS Nature of Payment in Expenses to Yes

  1. Press Alt + I for Account Invoice mode

  2. Press F2 and change the date to 10-10-2009

  3. In Party’s A/c Name field select Shreya Builders & Developers from the List of Ledger Accounts

  4. Under Particulars select Works Contract Purchase

  5. Enter Rs. 54,000 in the Amount field

  6. In the TDS Nature of Payment Details screen, accept the default details.

  7. Under Particulars select Input VAT @ 4%. VAT amount will be calculated and displayed automatically.

  8. In the TDS Nature of Payment Details screen, accept the default details.

  9. Under Particulars select Input Service Tax- Works Contract  @ 4% and press enter to view Service Tax Bill Details screen.

  10. In Service Tax Bill Details screen - in Service Tax field enter the applicable rate of Service Tax (instead of Default rate of service tax).  

In the present Example we have taken 4.12% as the Rate of Service Tax. Service Tax Bill Details is displayed as shown


[Img-116]

  1. Accept the Service Tax Bill Details screen

  2. In the TDS Nature of Payment Details screen, accept the default details.

  3. Under Particulars select TDS- Works Contracts and press enter to view TDS Details screen.

  4. In TDS Details screen

  5. select the Type of Ref as New Ref

  6. In Name field select the default Bill Name - Purc-6/1

  7. In Nature of Payment field select Payment to Sub-Contractors

  8. Assessable Value and TDS Amount will be displayed automatically


[Img-117]

Note: TDS will be calculated on the total amount of Rs. 58384.80 (Purchase cost of Works Contract + VAT + Service Tax)

  1. Press enter to accept the TDS Details scree

  2. In the Bill-wise Details enter the details as shown


[Img-118]

Completed Purchase Voucher screen is displayed as shown


[Img-119]

  1. Press enter to save.

Check the Reports for details on Tax Deducted

  1. TDS Computation for TDS Dedcuted.

  2. Input Serice Tax details after making the payment to the Party and then check Input Credit Form.

  3. VAT Computation for VAT details.

 
 
 
 
Tally.ERP 9 Reference Manual LIBRARY
1.
Installation of Tally.ERP9
2.
Site Licensing of Tally.ERP9
3.
Shortcut Keys in Tally.ERP9
4.
Maintaining Company Data
5.
Creating Masters
5a. Accounts Information [Creating Masters]
5b. Inventory Information [Creating Masters]
6.
Voucher Entry
7.
Reports in Tally.ERP9
8.
Excise for Dealer
9.
Excise for Manufacturer
10.
Reports [ Excise for Manufacturer]
11.
Excise for Importer
12.
Service Tax in Tally.ERP9
13.
Tax Collected at Source (TCS) in Tally.ERP9
14.
Tax Deducted at Source (TDS) in Tally.ERP9
15.
Value Added Tax (VAT) in Tally.ERP9
16.
Central Sales Tax (CST) in Tally.ERP9
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
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