Simple TDS Entry Example In Tally

Welcome back to our all accounting students in today's post we are going to solve some examples for tds entries in the tally.

TDS Entry Example In Tally

TDS in Tally

The full form of TDS is Tax Deducted at the Source. Which is called deduction of tax at source. Whenever any institution, firm or company, etc. is under the purview of TDS deduction. And if that institution, firm or company, etc. gives income to any person. So that institution, firm or company, etc. deducts some amount from that income. And the remaining amount is given to the person. So the amount deducted in this way is called a TDS deduction. So they do not keep the amount of TDS deduction deducted by any institution, firm or company, etc. with themselves. Rather it has to be deposited in that person's account with the government. The person from whom TDS is deducted. That person must have a PAN number. 

Otherwise, there is a provision of a 20% TDS deduction on the income of that person. TDS is an Indirect Tax. Which is a part of Income Tax.

TDS deduction side

1. Deductor: - The organization, firm, or company through which TDS is collected (deducted). He is called Deductor. And it is the responsibility of the same company. That he should deposit TDS with the government. The person from whom TDS is deducted. That person is given Form 26AS by the Deductor. In the 26AS form, the PAN number of that person and the amount of TDS deduction is written.

2. Deductee:- The person who receives the payment after the TDS deduction. That person is called the Deductee. The deductee receives Form 26AS from the deductor.

Now you guys know the basic of TDS so let's make some tds entries in tally.

TDS entry Example in Tally

Example 1: - Let's say you are a company that needs to record a TDS deduction on a payment made to a vendor. The vendor's name is ABC Suppliers, and you are deducting TDS at a rate of 10%. The payment amount is ₹10,000.

Create a ledger in Tally for ABC Suppliers:

• Go to Gateway of Tally > Accounts Info > Ledgers > Create.
• Enter the name as ABC Suppliers and select the appropriate ledger group.

Create a TDS ledger:

• Go to Gateway of Tally > Accounts Info > Ledgers > Create.

• Enter the name as TDS Payable and select the appropriate ledger group.

Record the TDS entry:

• Go to Gateway of Tally > Accounting Vouchers > F5: Payment.

• In the payment voucher, select ABC Suppliers as the Party's A/c Name.

• Enter the payment amount as ₹10,000 in the Debit column.

• In the Particulars column, select TDS Payable.

• Enter the TDS amount as ₹1,000 in the Credit column.\

• Provide any necessary narration or remarks.

• Save the voucher.

Example  2: Now let me tell you some other important query which is asked by so many students.

Journal Entry for TDS Receivable

Let's say you are a company that has received TDS deductions from your customers. The customer's name is XYZ Corporation, and they have deducted TDS at a rate of 10% on a sales invoice amount of ₹20,000.

Create a ledger for XYZ Corporation:

• Go to Gateway of Tally > Accounts Info > Ledgers > Create.

• Enter the name XYZ Corporation and select the appropriate ledger group.

Create a TDS receivable ledger:

• Go to Gateway of Tally > Accounts Info > Ledgers > Create.

• Enter the name as TDS Receivable and select the appropriate ledger group.

Record the journal entry for TDS receivable

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

• In the journal voucher, debit the TDS Receivable ledger for the TDS amount.

• Enter the debit amount as ₹2,000.

• In the Particulars column, select XYZ Corporation.

• Credit the XYZ Corporation ledger for the TDS amount.

• Enter the credit amount as ₹2,000.

• Provide any necessary narration or remarks.

• Save the voucher.

TDS payable entry in tally

Now let's take another example for TDS payable entry.

Let's say you are a company that needs to record TDS payable on an expense incurred. The expense is for professional services received from DEF Consultants, and the TDS rate is 10%. The expense amount is ₹5,000.

Create a ledger for DEF Consultants:

• Go to Gateway of Tally > Accounts Info > Ledgers > Create.

• Enter the name as DEF Consultants and select the appropriate ledger group.

Create a TDS payable ledger:

• Go to Gateway of Tally > Accounts Info > Ledgers > Create.

• Enter the name as TDS Payable and select the appropriate ledger group.

Record the TDS payable entry:

• Go to Gateway of Tally > Accounting Vouchers > F5: Payment.

• In the payment voucher, select DEF Consultants as the Party's A/c Name.

• Enter the expense amount as ₹5,000 in the Debit column.

• In the Particulars column, select TDS Payable.

• Enter the TDS amount as ₹500 in the Credit column.

• Provide any necessary narration or remarks.

• Save the voucher.

Conclusion

Here in this post, we add some examples for tds entry in tally with solution so if you are also learning tally then you should read our post and learn how to make a TDS voucher.