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Set Up Your Books For Tax Collected at Source (TCS)

You can enable the Tax Collected at Source (TCS) feature in TallyPrime, provide surcharge details, and create the masters required to record transactions.

 

Enable TCS

  1. Press F11 (Features) > set Enable Tax Collected at Source (TCS) to Yes.
    If you do not see this option:
    • Set Show more features to Yes.
    • Set Show all features to Yes.
  2. Enter the TAN registration number.
  3. Enter the Tax deduction and collection Account Number (TAN).
  4. Select the Collector Type.
  5. Enter the Collector branch/division.
  6. Enable the option Set/alter details of person responsible to display the Person Responsible Details screen. Enter the relevant details:
  7. Press Enter. The TCS Collector Details screen appears.
  8. Set Ignore IT Exemption Limit to:
    • Yes, if you don’t want to consider the IT exemption limit.
    • No, if you want to consider the IT exemption limit.
  9. Set the option Provide surcharge and cess details to Yes.
    In the TCS Collector Details screen, press F12(Configure) > set Enable surcharge and cess details for TCS to Yes.
  10. Enter the Surcharge and Cess details for each collectee status. You can enter the required surcharge slab details with the applicability date.
  11. Accept the screen. As always, you can press Ctrl+A to save.

 

Configure TCS Masters

TallyPrime facilitates defining TCS details at different levels. This provides the convenience of applying tax rules at the highest level, which is the company level, as well as the flexibility to modify, override or define details at the lower levels, based on one’s business requirement. The rules will be applied in this hierarchy:

  • Stock Group
  • Stock Item
  • Ledger Group
  • Ledger
  • Transaction
  • Transaction Entry

Note: The rules that are defined at the voucher type or voucher type class level will be used as template, thereby it will be used ONLY to fill the values in the transaction by default in creation mode.

Some of the scenarios where TCS applicability can be set, are given below:

Scenario 1: I don’t maintain inventory. I manage only accounts in my company.

For a company which maintains only accounts, TCS rates can be defined at the sales or purchase level.

  1. Gateway of Tally > Alter > type or select Ledger > and press Enter.
    Alternatively, press Alt+G (Go To) > Alter Master > Ledger > and press Enter.
  2. Select the sales/purchase ledger.
  3. Set the option Is TCS Applicable to Applicable.
    In the Ledger master, press F12(Configure) > set Provide TCS Details to Yes.
    If you do not see this option, ensure that Enable Tax Collected at Source (TCS) is set to Yes in F11 (Features) for your company.
  4. Press Ctrl+Enter on the Nature of Goods to set the tax rate.
  5. Enter the TCS rate in the TCS Nature of Goods screen.
  6. Accept the screen. As always, you can press Ctrl+A to save.

 

Scenario 2: I deal with goods for which every stock item has a different TCS category, and want to specify TCS rates.

For a company that deals with stock items that are tagged to a different TCS category, the TCS rate details have to be defined at the stock item level.

  1. Gateway of Tally > Alter > type or select Stock Item> and press Enter.
    Alternatively, press Alt+G (Go To) > Alter Master > Stock Item > and press Enter.
  2. Select the Stock Item.
  3. Set the option Is TCS Applicable to Applicable.
  4. Press Ctrl+Enter on the Nature of Goods to set the tax rate.
  5. Enter the TCS rate in the TCS Nature of Goods screen.
  6. Accept the screen. As always, you can press Ctrl+A to save.

 

Scenario 3: I maintain multiple stock items under each TCS category and want to specify TCS rates.

For a company that has multiple stock items under each stock category, the TCS rates can be defined at the stock group level.

  1. Gateway of Tally > Alter > type or select Stock Group > and press Enter.
    Alternatively, press Alt+G (Go To) > Alter Master > Stock Group > and press Enter.
  2. Select the Stock Group.
  3. Enable Set/Alter TCS Details to Applicable.
  4. Press Ctrl+Enter on the Nature of Goods.
  5. Enter the TCS rate in the TCS Nature of Goods screen.
  6. Accept the screen. As always, you can press Ctrl+A to save.

 

Scenario 4: I want to specify TCS applicability for sales and income ledgers.

  1. Gateway of Tally > Alter > type or select Ledger> and press Enter.
    Alternatively, press Alt+G (Go To) > Alter Master > Ledger > and press Enter.
  2. Select the Sales/Income ledger.
  3. Set the option Is TCS Applicable to Applicable.
  4. Press Ctrl+Enter on the Nature of Goods to set the tax rate.
  5. Enter the Section, Payment Code, and TCS Rate in the TCS Nature of Goods screen.
  6. Accept the screen. As always, you can press Ctrl+A to save.

 

TCS Natures of Goods

You can define the TCS nature of goods your business deals.

  1. Gateway of Tally > Create > type or select TCS Nature of Goods> and press Enter.
    Alternatively, press Alt+G (Go To) > Create Master > TCS Nature of Goods> and press Enter.
  2. Press Alt+H(Helper) to view the List of Nature of Goods.
  3. Select the required Nature of Goods. The Section and Payment code are displayed automatically.
  4. Enter the Rate of TCS for With PAN and Without PAN. The same appears in Rate for other deductee types.
  5. Enter the Threshold/exemption limit as applicable.
  6. Accept the screen. As always, you can press Ctrl+A to save.

 

Stock Items

You can create stock item masters for goods that are classified under the TCS nature of goods.

  1. Gateway of Tally > Create > type or select Stock Item> and press Enter.
    Alternatively, press Alt+G (Go To) > Create Master > Stock Item> and press Enter.
  2. Enter the Name.
  3. Select a Stock Group in the Under field.
    As always, press Alt+C, to create a master on the fly. Alternatively, press Alt+G (Go To) > Create Master > type or select Stock Groups > press Enter.
  4. Select a Units in the Units field.
    As always, press Alt+C, to create a master on the fly. Alternatively, press Alt+G (Go To) > Create Master > type or select Units > press Enter.
  5. Set the option Is TCS applicable to Applicable.
  6. Select the Nature of Goods from the List of Nature of Goods.
  7. Accept the screen. As always, you can press Ctrl+A to save.

 

Party Ledgers

TCS will be collected on the basis of the collectee type defined in the party ledger.

  1. Gateway of Tally > Create > type or select Ledger > and press Enter.
    Alternatively, press Alt+G (Go To) > Create Master > Ledger> and press Enter.
  2. In the Ledger master, pressF12 (Configure) > set Allow advanced entries in TCS masters to Yes.
  3. Enter the Name and select Sundry Debtors in the Under field.
  4. Enable the option Maintain bill-by-bill, to track the TCS bills.
  5. Enable the option Is TCS Applicable, to allow TCS collection for the ledger.
  6. Select a Buyer/Lessee Type from the list.
  7. Set Use Advanced configurations for TCS to Yes.
    • You can set the ledger to ignore income tax and/or surcharge exemption limits.
    • Enable the option Set/alter zero/lower rate of collection to Yes.
    • Select the required Nature of Payment for Zero/Lower Collection Details, enter the Certificate No./Date and the applicable dates.

      On selecting Section Number 206C and entering the certificate details, the transactions recorded using these ledgers will appear in the relevant sections of Form 27EQ.
  8. Enter the Mailing Details. Enable Provide Bank Details, to enter the bank details for the ledger.
  9. Enter the PAN/IT No. under Tax Information.
  10. Enable the option Provide PAN Details, if required.
  11. Accept the screen. As always, you can press Ctrl+A to save.

 

Sales Ledgers

You can create sales ledger with TCS nature of goods under Sales Accounts.

  1. Gateway of Tally > Create > type or select Ledger > and press Enter.
    Alternatively, press Alt+G (Go To) > Create Master > Ledger> and press Enter.
  2. Enter the Name.
  3. Select Sales Accounts in the Under field.
    As always, press Alt+C, to create a master on the fly. Alternatively, press Alt+G (Go To) > Create Master > type or select Sales Accounts> press Enter.
  4. Set Inventory values are affected to Yes.
  5. Set the option Is TCS Applicable to Applicable.
  6. Select the Nature of Goods from the List of Nature of Goods.
  7. Accept the screen. As always, you can press Ctrl+A to save.

 

TCS Ledgers

You can create a duty ledger for accounting for TCS and also specify the nature of goods.

  1. Gateway of Tally > Create > type or select Ledger > and press Enter.
    Alternatively, press Alt+G (Go To) > Create Master > Ledger> and press Enter.
  2. Enter the Name.
  3. Select Duties and Taxes in the Under field.
    As always, press Alt+C, to create a master on the fly. Alternatively, press Alt+G (Go To) > Create Master > type or select Duties and Taxes > press Enter.
  4. Select TCS as the Type of Duty/Tax.
  5. Select a Nature of Goods/Contract/License/Lease from the List of Nature of Goods.
  6. Accept the screen. As always, you can press Ctrl+A to save.
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