Creating Income Tax Deduction Pay Head

To create the Income Tax Deduction Pay Head,

Go to Gateway of Tally > Payroll Info. > Pay Heads > Create

1. Enter Pay Head name in the Name field

2. Select Employees' Statutory Deduction as the Pay Head Type from the List of Pay Head Types.

3. Select Statutory Pay Type as Income Tax

4. Select Current Liabilities from the List of Groups in the Under field

5. By default, Affect Net Salary is set to Yes

6. By default, the Pay Head component name entered in the Name field will appear in the Pay Slip, if you want to change the default pay head component name then type  required name in Name to appear in Payslip field

7. In the Calculation Type field is defaulted to As per Income Tax Slab

8. Select the appropriate Calculation Period from the List of Calculation Periods.

Note: To process salary weekly, fortnightly or daily along with TDS, day wise option should be selected as Calculation Period.

7. Press Enter to accept.

Note: Currently, the Income Tax Amount for the Employees needs to be calculated separately and entered while processing the payroll Voucher.