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Record TCS on Purchase of Taxable Stock Items

As per the TCS rules, the TCS amount paid on purchases is not required to be shown in the TCS returns. Hence, while recording purchases made by paying TCS, you need to use the tax ledger created under Duties & Taxes, with Type of Duty/Tax as Others. On using this tax ledger:

  • The tax amount will be auto-calculated as per the tax rate and the method of calculation defined in the ledger.
  • The tax amount calculated in the invoice will not affect the tax liability in the TCS duty ledger.

 

Create TCS Ledger

To ensure the TCS amounts paid on purchases do not reflect in your TCS returns, you need to group the tax ledger under Duties & Taxes, with Type of duty/tax as Others, as shown below:

Note: If you are using a common TCS ledger for stock items taxable under different TCS rates, leave the Percentage of calculation field blank. You can provide the TCS rates in the invoice.

Record TCS in purchase invoice for the stock item taxable under TCS, as shown below:

The Balance Sheet appears with values as shown below:

 

Record Purchase under TCS for Taxable Current Assets

In TallyPrime, you can record TCS on purchases by using the TCS ledger grouped under Current Assets. To ensure the TCS amounts paid on purchases do not reflect in your TCS returns, you need to select the Type of duty/tax as Others, as shown below:

Using TallyPrime, you can account for TCS under purchase when the purchased items fall under TCS norms.

The Balance Sheet appears with values as shown below:

 

Purchases with Calculation of TCS on Current Sub-Totals

If you have to calculate TCS on additional ledgers along with stock items attracting TCS, press F12 (Configure) in purchase invoice, and enable the option Calculate tax on current sub-total.

Record purchase invoice with separately charged expenses and TCS ledger as shown below:

 

Purchase of Taxable and Non-Taxable Stock Items

  1. Create a TCS ledger under Duties & Taxes or Current Assets as required, to view the amount under the required section of Balance Sheet.
  2. In the purchase invoice, select one stock item that is taxable under TCS, and another stock item that does not attract TCS.
  3. Select the TCS ledger. Manually calculate and enter the TCS amount applicable for the taxable stock item.
  4. Accept the screen. As always, you can press Ctrl+A to save.
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