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TDS on Fixed Assets [TDS] in Tally.ERP9

Example: On 6-8-2009 ABC Company purchased a machinery for Rs 5,00,000. To use this machine they require platform, civil structure, pipelines connections, electrical connections, fabrication works etc. at the cost of Rs. 1,00,000. On these expenses tax to be deducted at source.

To book all the labour charges transactions related to this machine ABC Company has created a ledger - CAPITAL WORK IN PROGRESS (MACHINE) grouped under Fixed Assets. After completing all the required work and calibration, this expense will be capitalized (added to the purchase cost).

On 10-8-2009 ABC Company received a bill (458) for Rs.60000 from Arun Contractors towards electrical and fabrication works.

Step 1: Create Fixed Asset Ledger

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

  • In the Name field enter the name of the ledger e.g. Capital Work In Progress (Machine)

  • Select Fixed Assets in the Under field

  • Set Inventory values are affected to No

  • Set Is TDS Deductable to Yes

  • Set Treat as TDS Expenses to Yes

  • In TDS Nature of Payment field select Payment to Contractors (Other Than Advertisement)

  • Set Used in VAT Returns to No

  • Press Enter to save.

Step 2: Create Party Ledger

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

  • In the Name field enter the ledger name e.g. Arun Contractors

  • Select Sundry Creditors in the Under field

  • Set Maintain balances bill-by-bill to Yes

  • Set Is TDS Deductable to Yes

  • In the Deductee Type field select Association of persons

  • Enter Mailing Details and Tax Information

  • Press Enter to save

Step 3: Create TDS Duty Ledger

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

  • In the Name field enter the Ledger Name e.g. TDS – Contractor Other Than Adv.

  • In the Under field select Duties & Taxes group

  • In the Type of Duty/Tax field select TDS

  • In the Nature of Payment field select Payments to contractors (Other Than Advertisement)

  • Press Enter to save

Step 4: Record a Journal Voucher

Note: Account the purchase of Assets by recording Journal/Purchase Voucher

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

  1. Press F2 and change the date to 10-08-2009

  2. In Debit field select Capital Work In Progress (Machine) from the List of Ledger Accounts

  3. Enter 60,000 in the Amount field and press enter to view Expense Allocation screen

  4. In the Expense Allocation screen accept the default details

  5. In Credit field select Arun Contractors to view TDS Details screen

  6. In the TDS Details screen

  7. In Type of Ref field select New Ref

  8. In the Name field Jrnl /14-1 is defaulted

  9. In the Nature of Payment field select Payments to Contractors (Other Than Advertisement)

  10. In the TDS Duty Ledger field select TDS – Contractor Other Than Adv.

  11. Assessable Amount defaults the amount specified against the expenses ledger and skips the field.

  12. Set Deduct Now field to Yes

  13. TDS Amount field displays the Tax amount deducted at source

  14. Payable Amount field displays the displays the amount (after TDS) payable to the Party


  1. In the Bill-wise Details screen

  2. In the Type of Ref field select New Ref

  3. In the Name field enter Bill-458

  4. Accept the default Amount and Dr/Cr allocations

  5. In the Type of Ref field select New Ref

  6. In the Name field enter Bill-458

  7. Accept the default Amount and Dr/Cr allocations

  1. In the Credit field TDS- Contractor Other Than Adv. In the Amount field the Tax deducted is defaulted automatically

  2. Enter Narration, if any


  1. Press Enter to 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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