To record a transaction attracting a lower rate with applicable TDS can be recorded by using the commission expense ledger.
The Assessing Officer shall issue a certificate for deduction of Tax at Lower rate than the relevant rate specified under the section, Where the assessing officer is satisfied that the total income of the recipient (Assessee) justifies the deduction of income tax at any lower rates than the rate specified under the sections specified under the act and has received an application in Form 13 from the assessee under sub-section (1) of section 197.
The certificate granted shall be valid for the assessment year specified and is valid only for the person named therein.
Scenario: On 16-05-2015, ABC Company received a bill from ACE Computers for ₹80,000 towards commission charges. ACE Computers has a certificate for deduction of Income tax at Lower rate @ 5%, on Commission.
To record expenses in the journal voucher
1. Go to Gateway of Tally > Accounting Voucher > F7: Journal.
2. Click F2: Date to change the date to 16-5-2015 .
3. Debit the Commission expense ledger.
4. Enter 80000 in the amount field.
5. Credit ACE Computers . The amount after TDS deduction will appear in the Amount field automatically.
6. Press Enter .
7. Enter the Bill-wise Details , as required.
8. Press Enter .
9. Credit the TDS tax ledger. The TDS amount will automatically filled in the Amount field.
10. Press Enter .
11. Enter Narration , if required.
The Journal voucher appears as shown below:
12. Press Ctrl+A to save the voucher.
In the text file generated as per File Validation Utility (FVU) version 5.6, the letter B appears as remarks for transactions recorded at lower or zero deduction for TDS nature for all the Nature of Payments under section 194J .
'Deducting Tax at Lower Rate (TDS)' has been shared with