how to enter tds entry in tally prime

Entering a TDS (Tax Deducted at Source) entry in Tally Prime involves a few setup steps followed by recording the actual transaction. Below is a complete, step-by-step guide covering configuration, ledger creation, and voucher entry—tailored for both beginners and practicing accountants.

1. Enable TDS Feature in Tally Prime

Before passing any TDS entry, ensure that the TDS feature is activated for your company.

• Go to Gateway of Tally → press F11 (Features).
• Under the Statutory & Taxation section, set:
  • Enable TDS = Yes
  • Enable Bill-wise Entry = Yes (recommended for tracking party-wise TDS)
• Press Enter to open the TDS Details screen.
• Fill in:
  • Deductor Type (e.g., Company, Individual, HUF)
  • Deductee Type
  • PAN Number , Address , and other required details
• Set Allow Advance Entry in Master = Yes (if needed for advance TDS)
• Save with Ctrl + A.

2. Create Required Ledgers

You’ll need at least three types of ledgers:

a. Expense Ledger (e.g., Professional Fees, Rent, Contractor)

• Go to Create > Ledger.
• Name: e.g., “Professional Fees”
• Under: Indirect Expenses (or relevant group)
• Set Nature of Payment = Select appropriate section (e.g., 194J for professional fees)
• Ensure TDS Applicable = Yes

b. Party Ledger (Sundry Creditor/Debtor)

• Name: e.g., “ABC Consultants”
• Under: Sundry Creditors
• Provide PAN , State , and enable TDS Deductible = Yes
• Link the correct Nature of Payment if not auto-assigned

c. TDS Duty Ledger

• Name: e.g., “TDS Payable – Professional Fees”
• Under: Duties & Taxes
• Type of Duty/Tax: TDS
• Select the relevant Nature of Payment (e.g., 194J)

💡 Tip: Tally Prime can auto-create these ledgers during voucher entry if you enable “Allow creation during entry.”

3. Record the TDS Entry (Using Payment or Journal Voucher)

Scenario: Paying Professional Fees with TDS Deduction

1. Go to Vouchers → press F5 (Payment) (or F7 (Journal) if not paying immediately).
2. Enter:
   • Date , Account (e.g., Bank/Cash)
   • In the Particulars section:
     • Debit: Professional Fees (full amount, e.g., ₹50,000)
     • Credit: ABC Consultants (net amount after TDS, e.g., ₹45,000)
     • Credit: TDS Payable – Professional Fees (TDS amount, e.g., ₹5,000 @10%)
3. Tally will auto-calculate TDS if:
   • Ledgers are correctly mapped to Nature of Payment
   • PAN is provided for the deductee
4. Enable Bill-wise Details if prompted, and enter reference (e.g., invoice number).
5. Save with Ctrl + A.

4. Verify TDS Reports

After posting entries, you can view TDS reports:

• Go to Display > Statutory Reports > TDS Reports
• Key reports include:
  • TDS Computation
  • TDS Payable
  • Form 26Q/24Q Preview
  • TDS Challan Status

This helps ensure your entries are compliant and ready for return filing.

Quick Checklist Before Filing TDS Returns

• ✅ TDS feature enabled with correct deductor/deductee type
• ✅ All party ledgers have valid PANs
• ✅ Nature of Payment correctly assigned
• ✅ TDS entries posted with bill-wise references
• ✅ TDS reports reconcile with actual deductions

TL;DR

To enter TDS in Tally Prime: enable TDS in F11, create expense/party/TDS ledgers with proper nature of payment, then record the transaction via Payment or Journal voucher—Tally auto-calculates TDS if setup is correct. Always verify using TDS statutory reports before filing returns.

Information gathered from public forums or data available on the internet and portrayed here.