QS TCS

Quick Setup for Tax Collected at Source in Tally.ERP 9 helps you to configure statutory setup required to maintain the financial records of Tax Collected at Source (TCS).

Go to Gateway of Tally > Quick Setup > Tax Collected at Source . Quick Setup screen for Tax Collected at Source will be displayed as shown

From this screen you can make required basic configurations like, company TCS details and masters to account statutory transactions. It also allows making advance configurations wherever applicable.

Configuration details will be displayed below the setup options once the configuration is done other wise application will display the status as Not Configured for Company Setup and 0 of 0 Configured for other setups (Masters/Advanced setup).

Procedure to Quick Setup for Tax Collected at Source

1. Company setup

Company Setup guides you to update relevant TCS details . To know how to update TCS details click on the link, C:Company TCS Details Setup

To update Company TCS Deductor Details press Alt+C or select the option C: Company TCS Details Setup and press Enter to view Company TCS Deductor Details screen.

In Company TCS Deductor Details screen

Tax Deduction and Collection Account Number: Enter the Tax Deduction and Collection Account Number (TAN) in this field. The Tax Deduction and Collection Account Number (TAN) is a ten-digit alphanumeric number, issued by the Income Tax Department (ITD) to the deductors.
Head Office Tax Deduction and Collection Account Number: In this field enter the head office Tax Deduction and Collection Account Number if any.
Enter the Income Tax Circle/Ward (TCS). This is issued by the Income Tax Department
Select the Collector Type from the List of Company Type. E.g. Others
In Name of Person Responsible field enter the name of the person responsible for filing the TCS returns.
In Son/daughter of field enter the name of the parent of the person responsible for filing TCS returns.
Enter the Designation of the person responsible for filing of the TCS returns.

Press enter to save.

Note: You can also update company TCS deductor details from F11: Features screen. To Enable excise Go to Gateway of Tally > F11: Features > Statutory & Taxation

To know more on updating Company TCS deductor details from F11: Features refer the topic - Enabling TCS in Tally.ERP9

Note: To move from one setup to another setup use Arrow (up and down) Keys.

2. Master Setup

Master Setup guides you to create masters like Stock Item,Tax ledgers and Customer ledgers by enabling relevant TCS options in the masters. For more details on master creation Click on the below links.

To create TCS nature of Stock Items press Alt+S or select the option S: Stock Items press Enter to view Stock Item Setup screen.

In Stock Item Setup screen

Enter the name of the Stock Item e.g. Timber in Name field.
Select the Group Name e.g. Primary in the Under field.
Select the unit of measurement e.g. MT (Metric Tones) of the stock item in the Units field (Use Alt +C to create Unit of Measurement).
In TCS Nature of Goods select Timber Obtained Under Forest Lease from List of TCS Types.

Press Enter to save.

Note: You can also create TCS Nature of goods from Gateway of Tally > Inventory Info. > Stock Items

To know more on creating TCS stock items refer the topic - Creating a Stock Item

To create TCS tax ledger press Alt+T or select T: Tax Ledgers and press Enter to view Tax Ledgers Setup sub-form.

In Tax Ledgers Setup screen

Enter the name of the Tax Ledger e.g. TCS @ 2.5% in Name field.
Select the Group Name e.g. Duties & Taxes in Under field.
In Nature of Goods/Contracts/License/Lease field select Timber Obtained Under Forest Lease from List of TCS Types.

Press Enter to save

Note: You can also create TCS tax ledgers from Gateway of Tally > Accounts Info. > Ledgers

To know more on creating TCS tax ledger refer the topic - Creating TCS Ledger.

To create customer ledger press Alt+A or select A: Party Ledgers and press Enter to view Party Ledger Setup screen

In Party Ledger Setup screen

In the Name field, enter the name of the buyer company e.g. Lakshmi Timbers.
In the Under field, select Sundry Debtors option from the List of Groups.
By default the option Is TCS Applicable will be set to Yes
In Collectee Type field select Association of Persons from List of Collectee Types
In PAN/IT No. field enter customer PAN Number

Press Enter to save.

Note: You can also create Party ledgers from Gateway of Tally > Accounts Info. > Ledgers

To know more on creating party ledger refer the topic - Creating Party Ledger.

3. Advanced Setup

Advance Setup is an optional (not a must) setup. Advance set up is required, only when you want configure for Lower/No Collection and if you want to calculate surcharge by ignoring the exemption limit.

Advanced Setup guides you to configure for lower/No Collection and to Ignore Surcharge exemption limits. For more details on configuring for lower/No Collection and to Ignore Surcharge exemption limits Click on the below links.

Note: To view the advance setup options press Enter from Advanced Setup or press F5 key or click on F5: Show Adv config button in the buttons bar.

A lower rate of TCS will be allowed, where the Assessing Officer is satisfied that the total income of the buyer justifies the collection of tax at any lower rate than the relevant rate specified in Section 206C (1), Buyer (or licensee or lessee).

Lower rate of TCS will be allowed on an application made by the buyer (or licensee or lessee) under sub-section (9) of section 206C in Form No. 13. The certificate granted shall be valid for the assessment year specified and is valid only for the person named therein.

In Tally.ERP 9, the user can record and compute TCS on transactions, on which lower rate of collection is applicable.

To configure for Lower/No Collection for party press Alt+L or select L: Configure Lower/No Collection (Sec 206C) and press Enter to view Lower/No Collection (Sec 206C) Setup sub-form.

TCS @ Lower Rate

Example: Modren Timbers has a certificate for lower collection of TCS @ 2%

In Lower/No Collection (Sec 206C) Setup screen

In the Name field, enter the name of the buyer company e.g. Modren Timbers.
In the Under field, select Sundry Debtors option from the List of Groups.
In Collectee Type field select Individual/HUF -Resident from List of Collectee Types
Enable the field Set Lower/No Collection to Yes to view Lower/No Collection Setup screen
In Lower/No Collection Setup screen
Section Number field by default Tally.ERP 9 displays section 206C, as the lower/no deduction is allowed under section 206C.
In TCS Lower Rate (%) field enter the percentage of TCS allowed e.g. 2%

Press Enter to save Lower/No Collection Setup screen.
In PAN/IT No. field enter customer PAN Number

No Collection Of TCS

Example: Southern Timbers has a certificate for No collection of TCS - 0%

In Lower/No Collection (Sec 206C) Setup screen

In the Name field, enter the name of the buyer company e.g. Southern Timbers.
In the Under field, select Sundry Debtors option from the List of Groups.
In Collectee Type field select Individual/HUF -Resident from List of Collectee Types
Enable the field Set Lower/No Collection to Yes to view Lower/No Collection Setup screen
In Lower/No Collection Setup screen
Section Number field by default Tally.ERP 9 displays section 206C, as the lower/no deduction is allowed under section 206C.
In TCS Lower Rate (%) field enter the percentage of TCS allowed e.g. 0%

Press Enter to save Lower/No Collection Setup screen.

Press enter to save.

Note: You can also create Party ledgers and configure for lower rate from Gateway of Tally > Accounts Info. > Ledgers

To know more on creating party ledger refer the topics

1. Creating Party Ledger- Lower Rate

2. Creating Party Ledger - No Collection

As per Income Tax Act, the Assessee is liable to pay Surcharge, when his turnover exceeds the prescribed threshold limits. In TCS, when the turnover of the Buyer / Lessee exceeds the threshold limit, Surcharge is applicable on the entire amount right from the first transaction.

In case, where you know that the total turnover of the party exceeds the threshold limit for the surcharge calculation, instead of collecting surcharge when the turnover exceeds the threshold limit, you can configure the party ledger to calculate surcharge from the first transaction by ignoring the exemption limit.

To configure party ledger to ignore surcharge exemption press Alt+S or S: Ignore Surcharge Exemption and press Enter to view Ignore Surcharge Exemption Setup sub-form.

Example: Southern Timbers is a regular customer and you know that the total turnover exceeds the prescribed surcharge threshold limits. So you want the party ledger to be configured to calculate surcharge from first transaction.

In Ignore Surcharge Exemption Setup screen

Select Southern Timber and Tab down to Ignore Surcharge Exemption field and set to Yes

Press Enter to save.

Quick Setup - Tax Collected at Source