Expenses Partly Subject to TDS (Journal Voucher)

In the event, where a part of the expenditure is not subject to TDS and the balance amount is subject to TDS, it is crucial to determine the accurate value of expenses for computation of TDS.

Tally.ERP 9 provides the flexibility to enter information in the same voucher. Consider the following scenario to illustrate the Expenses partly subject to TDS.

Example: ABC Company received a bill from Phoenix Agencies for Rs. 1,12,360 out of Which Rs. 1,00,000 is towards the Advertising Services provided.  

 

In the above transaction Bill amount includes other expenses of Rs. 12,360 on which TDS is not applicable. Let us understand how to configure Tally.ERP 9 to compute tax only on the Assessable Value (1,00,000).

Set up:

In F12: Configure (Journal Configuration)

 

To create Journal Voucher:

Go to Gateway of Tally > Accounting Vouchers > F7: Journal

  1. Press F2 and change the date to 08-04-2009.

  2. In Debit field select Advertisement Expenses from the List of Ledger Accounts.

  3. Enter 1,12,360 in the Amount field and press enter.

  4. The Expense Allocation -  TDS Nature of Payment Details screen is displayed.

 

Note: When Allow Alteration of Nature of Payment in Expenses is set to Yes in F12: Voucher Entry Configuration, Tally.ERP 9 facilitates Assigning/ Altering Nature of Payments and Assessable value of the Expenses during voucher entry.

 

The TDS Nature of Payment Details screen displays the Nature of Payment and the Assessable Value of the expenditure.

 

Note: Assessable Value is the amount on which the TDS will be computed. In the above transaction the Bill amount of Rs. 1,12,360 includes other expenses of Rs 12,360 on which the Tax cannot be deducted. Thus assessable value is arrived at by deducting Service tax from the Bill amount

Bill amount (1,12,360)–other expenses (12,360) = Assessable Value (1,00,000)

 

  1. In the Credit field select Phoenix Agencies and press Enter.

  2. In TDS Details screen

 

Note: The amount of Rs.12,360, on which TDS is Not Applicable is shown separately and is not considered for TDS calculation.

  1.  Payable Amount as calculated in the TDS Details screen will be defaulted in the Party’s Amount (Credit) field.

  2. In Bill-wise Details screen:

  3. Select New Ref as the Type of Ref

  4. In the Name field enter the Bill name as Bill -911

  5. Skip the Due Date or Credit Days field

  6. Accept the default amount allocation and Dr/Cr. By default Tally.ERP 9 displays the Bill amount in the amount field as the credit balance.

  7. Press Enter, select New Ref as Type of Ref and Enter Bill name as Bill -911

  8. Skip the Due Date or Credit Days field and accept the default amount allocation and Dr/ Cr. By default Tally.ERP 9 displays the Tax amount in the amount field as the debit balance.

  1. In the Credit field select TDS - Contractor from the List of Ledger Accounts.

  2. In the Amount field, Rs. 1000 [Bill amount (1,12,360) - Pending Amount (1,11,360)] is displayed automatically.

  3. Enter Narration, if required.

 

  1. Press Enter to accept and save.