TDS in Tally 9.0

TDS means Tax Deducted at Source. The concept of TDS was introduced in the Income Tax Act, 1961, with the objective of deducting the tax on an income, at the source of income. It is one of the methods of collecting Income Tax, which ensures regular flow of income to the Government.

TDS Process

1. Deductee (Seller) provides Services and Bill to the Deductor (Buyer)

2. Deductor makes the payment after deducting TDS

3. Deductor remits the TDS amount into Bank (Treasury)

4. Bank (Treasury) remit the amount to the Government Account

5. Deductor Issues Form 16A to Deductee for the TDS amount deducted

6. Deductor Files the e-TDS to NSDL

7. NSDL uploads the e-TDS information to Income Tax Department

Example :

15-4-2008

Received Invoice from Swayam Associates, Chartered Accountant, towards Internal Audit of Accounts Rs.25,000

20-4-2008

Paid Rs. 22,167 to Swayam Associates towards his Invoice after deducting TDS Rs.2,833 on amount payable to him.

20-4-2008

Paid Rs. 2,833 by cheque of Axis Bank towards TDS on Internal Audit to the Authorized Bank Treasury.

• Tax Assessment Number (TAN) is a 10-digit alphanumeric number issued by the Income Tax Department (ITD) to the Deductor.
• Income Tax Circle / Ward (TDS) is issued by the Income Tax Department and represents the area where the deductor is supposed to file TDS Returns.
• Deductor Type : Government or  Others
• Name and Designation of the authorized person who is responsible to file TDS Returns.

Step 2 :