Wednesday, July 31, 2013

TDS on Expenses-with Inventory (Purchase Voucher)


However in day-to-day business transactions, some times you have to face some complex cases e.g. a sales or purchase transaction where both Vat and TDS  is charged so how you will account this ?
This article will help you to record such transactions, where TDS on Expenses with Inventory applied for purchase vouchers
Example: On 2-8-2009 ABC Company received the bill for Rs. 52000 (for the supply of 1000 cartons @ 50 per carton and VAT @ 4%) from AK Enterprises. Cartons are printed with the company logo and other information as required on which (including the VAT amount) TDS is applicable.
The above transaction will be recorded in a Purchase Voucher
Step 1: Create Stock Item
Go to Gateway of Tally > Inventory Info. > Stock Item > Create
In the Name field enter the Stock Item Name e.g. Cartons
In the Under field select Primary group
In the Unit field select Nos
In the Rate of VAT (%) field enter 4%
Press Enter to save
Step 2: Create Party Ledger
Go to Gateway of Tally > Accounts Info. > Ledgers > Create
In the Name field enter the Ledger Name e.g. AK Enterprises
In the Under field select Sundry Creditors group
Set Maintain balances bill-by-bill to Yes
Enter the Default Credit Period if any
Set Is TDS deductible to Yes
In Deductee Type field select Company-Resident
Enter the Mailing Details and  Tax Information
Press Enter to save
Step 3: Create Purchase Ledger
Go to Gateway of Tally > Accounts Info. > Ledgers > Create
In the Name field enter the Ledger Name e.g. Purchase @ 4%
In the Under field select Purchase Accounts group
Set Inventory values are affected to Yes
Set Used in VAT Returns to Yes
In the VAT/TAX Class filed select  Purchases @ 4%
Set Is TDS deductible to Yes
In the Default Nature of Payment field select Payment to Contractors (Other Than Advertisement)
Set Use for Assessable Value Calculation to No
Press Enter to save
Step 4: Create VAT Duty Ledger
Go to Gateway of Tally > Accounts Info. > Ledgers > Create
In the Name field enter the Ledger Name e.g. Input VAT @ 4%
In the Under field select Duties & Taxes group
In the Type of Duty/Tax field select VAT
In the VAT/TAX Class select Input VAT @ 4%
Set Inventory values are affected to No
Set Rounding Method as Not Applicable
Set Is TDS Applicable to Yes
In the Default Nature of Payment field select Payments to contractors Other Than Advertisement
Press Enter to save
Step 5: Create TDS Duty Ledger
Go to Gateway of Tally > Accounts Info. > Ledgers > Create
In the Name field enter the Ledger Name e.g. TDS – Contractor Other Than Adv.
In the Under field select Duties & Taxes group
In the Type of Duty/Tax field select TDS
In the Nature of Payment field select Payments to contractors (Other Than Advertisement)
Press Enter to save
Step 6: Create Purchase Voucher
Go to Gateway of Tally > Accounting Vouchers > Press F9: Purchase
In F12: Configure
Ensure the option Use Common Ledger A/c for Item Allocation to Yes
1. Ensure the Purchase Voucher is in Item Invoice Mode
2. Press F2 and change the date to 2-8-2009
3. In the Supplier Invoice No. field enter the reference number as 4587
4. In party A/c Name field select AK Enterprises
5. In the Purchase Ledger field select Purchase @ 4%
6. In the VAT/Tax Class field Purchases @ 4% will be defaulted automatically as defined in the ledger master
7. In the Name of Item field select Cartons from the List of Items
8. Enter 1000 in the Quantity field
9. In the Rate field enter the Rs.50
10. Rs.50000 will be automatically updated in the Amount filed
1. In the TDS Nature of Payment Details screen accept the default details
Note: The TDS Nature of Payment screen will be displayed to only when the option Allow Alteration of TDS Nature of Payment in Expenses in F12: Configure (Voucher Entry Configuration)
1. Select Input VAT @ 4% ledger from the List of Ledger Accounts.
2. VAT amount of Rs.2000 will be updated automatically in the Amount filed and press enter to view the TDS Nature of Payment Details screen
Note: TDS Nature of Payment Details screen is displayed even for the VAT ledger as the Vat amount is also considered for TDS calculation.
1. Select TDS – Contractor Other Than Adv ledger  and press enter to view TDS Details screen
2. In the TDS Details screen
3. In Type of Ref field select New Ref
4. In the Name field the reference number is defaulted as Purc / 4-1
5. In the Nature of Payment select Payments to Contractors (Other Than Advertisement)
6. Assessable Amount and TDS Amount is defaulted automatically
Note: The TDS amount of Rs. 1040 will be displayed with negative sign.
1. Set Show Statutory Details to Yes to view the duty calculation
2. In the Bill-wise Details screen
3. In Type of Ref field select the New Ref as the Method of Adjustment
4. In the Name field enter Bill-897
5. In the Amount and Dr/Cr field keep the default allocation
6. In the Type of Ref field select New Ref
7. In the Name field enter Bill-897
8. In the Amount and Dr/Cr filed keep the default allocation
1. Enter the Narration if required
If you have any question, please post the same on Support forum only

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