https://help.tallysolutions.com/docs/te9rel64/Tax_India/tcs/interest-and-penalty.htm

Recording Payment of Interest and Penalty (TCS)

Delayed payment of TCS to the department will attract interests and penalties. You can record these payments in a payment invoice.

For example , Sujatha Timber Company had made a sale of Timber to Ganesh Traders , and TCS @ 2.5% was collected. Delayed payment of TCS was made on 25-5-2015 , for which an interest of ₹ 200 was applicable. Also, ₹ 100 had to be paid as penalty for Late Payment.

To record payment of interest and penalty

1. Go to Gateway of Tally > Accounting Vouchers > F5: Payment

2. Select cash or bank ledger in the Account field.

3. Select Interest ledger which is under Indirect Expenses group.

4. Select Interest from the List of Payment Type .

5. Enter 200 in the Amount field.

6. Select Penalty ledger which is under Indirect Expenses group.

7. Select Penalty from the List of Payment Type .

8. Enter 100 in the Amount field.

9. Press Enter .

10. Enter Narration , if required.

The Payment invoice appears as shown below:

11. Press Ctrl + A to save the invoice.