As per the Income-tax Department guidelines, returns up to 31 March 2026 must be filed using the previous return formats, while returns from 1 April 2026 onwards must be filed using the new formats under the Income-tax Act, 2025. Since revised returns can also be filed for the current year and the preceding two years, TallyPrime supports both report and e-Return formats.

The Country specified in the Company Alteration screen is picked as the deductor’s Country/Region in all e-Return forms (Forms 138, 140, 143, and 144).

TallyPrime captures Total Tax Deducted in CD Record, Field No. 8 as the sum of Income Tax + Surcharge + Cess, based on the latest PDF format published by the Income-tax Department. Although the Protean file structure refers only to Income Tax, TallyPrime follows the Income-tax Department’s PDF specification.

No. This is currently not supported in TallyPrime. It will be addressed in an upcoming TallyPrime release.

Until then, refer to the department’s TDS Form 144 and manually enter the applicable Nature of Remittance in the Nature of Payment master. The entered value will be exported in the e-Return.

The value ‘C’ indicates that the tax has been paid by way of challan. Since the Book Adjustment mode is applicable only to Government organizations and is not supported in TallyPrime, the value ‘C’ is always exported.

TallyPrime exports Total Tax Deducted as the sum of Income Tax, Surcharge, and Cess, in accordance with the latest specification published by the Income-tax Department.

The Contact Country Code is picked from the Country field, and the Contact Number is picked from the Phone Number field in the Company Alteration screen.

Applicable value should be Y/N (Yes or No). TallyPrime currently exports the hardcoded value ‘Y’.

Field No. 13 – Mode of Payment of Tax is a mandatory field in the e-Return.

The Book Adjustment option is applicable only for TDS transactions of Government organizations and is not supported in TallyPrime. Therefore, TallyPrime always exports the value ‘C’, indicating that the tax has been paid by way of challan.

es. Under the revised e-Return format, Field No. 33 accepts only a 15-character certificate number. Providing the earlier 10-character certificate number results in the error: T_FV_6455 – Invalid value under ‘Certificate number of certificate issued’ field.

This is currently not supported in TallyPrime. It will be addressed in an upcoming TallyPrime release.

Until then, configure the Lower/Zero Deduction provisions using the existing Section 197 or 197A options in the TDS Party Master. The applicable remarks ‘A’ or ‘B’ value will be exported in the e-Return.

For transactions under the old TDS Section 194Q, TallyPrime checks the Section and Threshold Limit defined in the TDS Nature of Payment/TCS Nature of Goods master.

If the transaction value is below the exemption limit, it is displayed under the Under Exemption Limit section in Form 26Q.

To comply with the revised e-TDS return requirements, such transactions are now exported in the e-Return with the remark ‘Y’ to indicate that they are below the exemption limit.

No. These fields are applicable only for NRI deductees with PAN status as PANNOTAVBL, PANAPPLIED, or PANINVALID. Although TallyPrime Release 7.1 exports these fields for all deductees based on an earlier department notification.

The department has since restored the previous requirement, making these fields optional except for the specified NRI deductees. This will be corrected in an upcoming TallyPrime release.

Earlier, Bank Challan Number (Field No. 12) and DDO Number (Field No. 14) were separate fields. Under the new e-Return format, these have been consolidated into Field No. 17 – Bank Challan No./DDO Serial Number.

TallyPrime exports the Bank Challan Number entered through the Payment Voucher or updated via the Challan Reconciliation Report to this field.

This is currently not supported in TallyPrime. It will be addressed in an upcoming TallyPrime release.

As a workaround, create the Nature of Payment with Section 194Q and Payment Code 1031. The Purchase of Any Goods (194Q) provision will then appear under Zero/Lower Deduction Details, and the applicable ‘S’ remark will be exported in the e-Return.

Yes. Under the Income-tax Act, 2025, the remark ‘S’ is applicable only for Purchase of Any Goods under TDS Section Code 1031. It is no longer applicable for Subsequent Software Purchases.

This is currently not supported in TallyPrime. It will be addressed in an upcoming TallyPrime release.

Until then:

• Manually change the No PAN rate to 5%.
• Press F12 (Configure) > Allow calculating tax on value exceeding the threshold/exemption limit to Yes to display the threshold calculation option.

No, you don’t need to upgrade your TallyPrime to the latest release to implement TDS changes as per the New Income Tax Act, 2025 provisions.
In your current release, follow the steps:

• Create a new TDS Nature of Payment.
• Alter the existing Expenses/Purchase ledgers with the newly created TDS Nature of Payment.
• Create a new TDS duty ledger for specific Nature of Payment, if needed.

You can then continue recording transactions, as per your business need.

To get the new TDS sections in TallyPrime:

• Create a new TDS Nature of Payment, as per the New Income Tax Act, 2025 with the notified Section and Payment Code.
• Alter the existing Expense/Purchase ledger, as applicable.
  • Place the cursor on Nature of Payment.
  • Select the newly created TDS Nature of Payment, accept the master, and enter the Revised Applicability Date as 01-Apr-2026.
  • Press Ctrl+A to save the changes.
    If you are using a common duty ledger, no changes are required.
    However, if you need a duty ledger for a specific Nature, then you need to create a new TDS duty ledger and link it to the respective TDS Nature of Payment.
• If you want to override TDS Nature of Payment in the transaction, select the newly created Nature of Payment from 1-Apr-2026.

Updating Section or Payment code in existing TDS Nature of Payment will affect the Payment Entries and return filing process for the previous period/year.

We recommend you to create a new Nature of Payment and tag it with the new Applicable from date in the existing Purchase/Expense ledger.
If you are using a Common TDS duty ledger (tagged as Any in Nature of Payment), then continue using the same TDS duty ledger.
And select the newly created Nature of Payment in the transaction.
However, if specific Nature of Payment is tagged to the TDS duty ledger, then you need to create a new TDS duty ledger with the newly created Nature of Payment.

As per traditional practice, if the latest payment code is applied to previous payments and returns, then you could have updated the existing master. However, we are still awaiting clarification from the department. Therefore, as a precautionary approach, it is preferable to create a new TDS Nature of Payment to avoid any future modifications.

Yes, this new TDS Nature of Payment is available in the list of Nature of Payment (wherever applicable).

Only the TDS category name – Payment of certain amounts in cash – is provided in the Nature of Payment list. The calculation is not supported.

As per Finance Bill No. 2, this TDS nature of payment is applicable for financial institutions. The department has notified that if a person makes cash withdrawals from financial institutions in excess of the threshold limit of ? 1 crore, the financial institution must deduct TDS on the difference amount before making the payment. We are working to support TDS calculation as per this requirement, and a resolution will be available in our upcoming release.

In the PAN not available for party screen of Form 26Q – Uncertain Resolution, keep the cursor on PAN No. field. Enter one of the terms given below, based on the corresponding reason:

1. PANAPPLIED – If the party has given a declaration stating that he/she has applied for PAN, but are yet to receive the same.
2. PANINVALID – If the PAN format provided by the party is incorrect.
3. PANNOTAVBL – If the party has not given any declaration or PAN number.

The cursor will skip the PAN Status column. Once you save this screen, the voucher will be included in the return.

Consider the following example, in which the error Partially overlapped can occur.

A Stat Payment already exists (made on 12-Dec-2018) for a particular period (1-Nov-2018 to 30-Jan-2019). If another stat payment is recorded (on 12-Jan-2019) for an overlapping period (1-Jan-2019 to 31-Jan-2019), the error Partially overlapped occurs while saving the voucher. To correct this:

• Gateway of Tally > Display More Reports > Statutory Reports > TDS Reports > Challan Reconciliation.
  Alternatively, Alt+G (Go to) > type or search Challan Reconciliation > Press Enter.
• View the TDS Challan Reconciliation report for any date on which the payment entry was recorded (12-Dec-2018, in this example).
• Click L: Show All and correct the To period for the voucher (as 30-Nov-2018, in this example), and save it.

Now you can record a new Stat Payment voucher.

When the stat payment transaction recorded to remit the TDS amount to the department is not reconciled with the challan details, the information of deductees from whom TDS was deducted, was not captured in the e-TDS return file generated for Form 26Q and Form 24Q.

You need to reconcile the TDS payment transaction and record challan details to get deductee information in the e-TDS file.

1. Go to Gateway of Tally > Display> Statutory Reports> TDS Reports > Challan Reconciliation.
   Alternatively, Alt+G (Go to) > type or search Challan Reconciliation > Press Enter.
2. Select the required payment transaction in the Tax Reconciliation Report screen.
3. Press Alt+R (Reconcile) to reconcile.
4. Enter the From and To date of the quarter, Cheque/DD No., Cheque/DD Date, BSR Code of the bank, Challan No. and Challan Date.
5. Press Ctrl+A to accept.

After challan reconciliation, go to Form 26Q report, re-compute and overwrite the returns, before generating the e-TDS file.

You can set the threshold/exemption limit for purchases with TDS u/s 194Q in the Nature of Payment master. Once you have entered the limit, you can also choose whether or not to calculate tax on values exceeding the threshold/exemption limit.

There can be several reasons why TDS is not getting calculated automatically.

TDS Nature of Payments

• Threshold limit – Ensure the Purchase or Payment value exceeds the defined exemption limit; otherwise, TDS will not apply. To learn how to configure the TDS Nature of Payments, refer to TDS Nature of Payment.

TDS Applicability

• Expense or Purchase Ledger – Verify that TDS is enabled and correctly configured in the ledgers. To learn how to configure ledgers for TDS calculation, refer to Ledger.
• Party Master – Ensure the party is marked with TDS applicability and has valid PAN details. To learn how to configure the Party Master for TDS calculation, refer to Party Ledger.
• Duty Master – Ensure that the correct TDS Nature of Payment is selected in the Duty Master. To learn how to configure the Duty Ledger for TCS calculation, refer to TDS Ledger.

Ensure the TDS Nature of Payments is applicable and consistent across all these masters.  Also, if TDS NOP is overridden at the transaction level, ensure that the correct NOP is selected.

TDS may be deducted at a higher rate if the party’s PAN is not available in the Party Master. To ensure TDS is calculated at the correct rate, update the party’s PAN details in the Party Ledger. To learn how to configure the Party Master for TDS calculation, refer to Party Ledger.