This page summarises the impact and changes to be made in Tally.ERP 9 with respect to all the announcements made by the government that require changes in your book keeping practices. These changes are documented in detail with step by step guide to the changes needed in Tally.ERP 9.
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Finance Minister announcement related to 20 lac crore stimulus package on 13th May 2020
The government has announced a 20 lakh crores stimulus to mobilise the economy. While there are many elements in this announcements there are two points that will affect your book keeping - reduced rate of TDS and PF contributions.
● Reduce TDS rates by 25 percent
● Reduce TCS rates by 25 percent
● Reduce PF Contribution percentage
A 25% reduction in TDS rate is announced for all non-salary payments such as interest, rent, brokerage, supply, and so on. This is applicable from 14th May 2020. You have to make this change in your TDS masters in Tally.ERP 9. More precisely you have to update the TDS percentage in your nature of payment masters. When you want to change the TDS rate back to the original, you alter the TDS masters and set the rate.
How does it work : In Tally.ERP 9, nature of payment acts as the primary source of information for TDS rates, applicable persons, income tax sections and so on. Further, you will assign the required nature of payment in all other TDS related masters such as TDS tax ledger, expense ledger, and so on. When these ledgers are used in a payment or purchase transaction the TDS rate configured in nature of payment master is automatically applied.
1. Update TDS rate in Nature of Payment
a. Go to Gateway of Tally > Accounts Info. > Statutory Info. > TDS Nature of Pymts > Alter .
b. In the TDS Nature of Payment Alteration screen, select the nature of payment for which TDS rate has to be reduced. For example, Rent of Land, Building Or Furniture.
c. In Rate for individuals/HUF and Rate for other deductee types reduce the rate by 25%. For example, if the existing rate is 10%, reduce it by 25 percent, and enter 7.5%.
d. Press Enter to view the Rate & Exemption Limit screen to set the revised applicability date.
e. Enter the Applicable from as 14-May-2020 and press Enter .
f. Press Enter to save the changes.
2.
Record
transactions using the expense or TDS tax ledgers in which this nature
of payment is assigned.
The TDS is calculated based on the reduced TDS rate of 7.5% as shown below:
Hereafter, the revised rate will be applied for TDS. You can modify this later, as needed.
Note : You can also use the L : Details option in the TDS Nature of Payment Alteration screen to update the tax rate.
Press Alt+L and enter the Applicable From date and Tax Rate in the respective columns.
A 25% reduction in TCS rate is also announced for payments. This is applicable from 14th May 2020. You have to make this change in your TCS masters in Tally.ERP 9. More precisely you have to update the TCS percentage in your nature of goods masters. When you want to change the TCS rate back to the original, you can alter the TCS masters and update the rate.
How does it work : In Tally.ERP 9, nature of goods acts as the primary source of information for TCS rates, applicable persons, tax sections and so on. Further, you will assign the required nature of goods in all other TCS related masters such as TCS tax ledger, sales ledger, and so on. When these ledgers are used in a payment or sales transactions the TCS rate configured in nature of goods master is automatically applied.
1. Update TCS rate in Nature of Goods.
a. Go to Gateway of Tally > Accounts Info. > Statutory Info. > TCS Nature of Goods > Alter .
b. In the TCS Nature of Goods Alteration screen, select the nature of payment for which TCS rate has to be reduced. For example, Timber Obtained Under Forest Lease.
c. In Rate for individuals/HUF and Rate for other collectee types , under With PAN reduce the rate by 25%. For example, if the existing rate is 2.5%, reduce it by 25 percentage, and enter 1.875%.
d. Press Enter to view the Rate & Exemption Limit screen to set the revised applicability date.
e. Enter the Applicable from as 14-May-2020 and press Enter .
f. Press Enter to save the changes.
2. Record transactions using the party or TCS tax ledgers in which this nature of goods is assigned. The TCS is calculated based on the reduced TCS rate of 1.875%
Hereafter, the revised rate will be applied for TCS. You can modify this later, as needed.
Note : You can also use the L : Details option in the TDS Nature of Goods screen to update the tax rate.
Press Alt+L and enter the Applicable From date and Tax Rate in the respective columns.
The statutory PF contribution is reduced from 12 percent to 10 percent for those not covered under EPF benefits. This reduction is next 3 months.
You have to reduce the contribution percentage in the Employee PF contribution payhead master. At the end of the reduction period, you can update the master again to the original rate.
How does it work : The salary of the employee is calculated based on the values and percentages configured in the pay head masters. Once the rate is changed in the pay head master, the update values are calculated in salaries where the pay head is used.
Update the payhead master
1. Go to Gateway of Tally > Payroll Info. > Pay Heads > Alter .
2. Select the Employee's PF Contribution pay head.
3. Navigate to Computation Information section in the Pay Head Alteration screen.
4. Start a new row in the Effective From column and enter the effective date for the reduced contribution percentage.
5. Select the option Start Afresh in the Amount Greater Than column.
6. Select Percentage in the Slab Type column.
7. Enter 10% in the Value column.
8. Press Enter and save the changes.
Record a payroll voucher for employees with this pay head. The PF contribution is calculated based on 10% starting from the set effective date.
