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.
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.
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
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
Note: Account the purchase of Assets by recording Journal/Purchase Voucher
Go to Gateway of Tally > Accounting Vouchers > F7: Journal
Press F2 and change the date to 10-08-2009
In Debit field select Capital Work In Progress (Machine) from the List of Ledger Accounts
Enter 60,000 in the Amount field and press enter to view Expense Allocation screen
In the Expense Allocation screen accept the default details
In Credit field select Arun Contractors to view TDS Details screen
In the TDS Details screen
In Type of Ref field select New Ref
In the Name field Jrnl /14-1 is defaulted
In the Nature of Payment field select Payments to Contractors (Other Than Advertisement)
In the TDS Duty Ledger field select TDS – Contractor Other Than Adv.
Assessable Amount defaults the amount specified against the expenses ledger and skips the field.
Set Deduct Now field to Yes
TDS Amount field displays the Tax amount deducted at source
Payable Amount field displays the displays the amount (after TDS) payable to the Party
In the Bill-wise Details screen
In the Type of Ref field select New Ref
In the Name field enter Bill-458
Accept the default Amount and Dr/Cr allocations
In the Type of Ref field select New Ref
In the Name field enter Bill-458
Accept the default Amount and Dr/Cr allocations
In the Credit field TDS- Contractor Other Than Adv. In the Amount field the Tax deducted is defaulted automatically
Enter Narration, if any
Press Enter to save
'TDS on Fixed Assets' has been shared with
