Tally Erp9 Lesson 13 Management Tax Collected At Sourse

  Module 13: Managing Tax Collected at Source (TCS)

Introduction to TCS: Understanding TCS and Its Application

Tax Collected at Source (TCS) is a tax payable by a seller, which they collect from the buyer at the time of sale. TCS is applicable under specific transactions as prescribed by the Income Tax Act of India. These transactions typically involve goods like alcohol, tendu leaves, timber, scrap, minerals, and others, including specific contractual and leasing activities.

Understanding TCS is critical for businesses that deal with such taxable items. Sellers must collect this tax at a specific rate from the buyer and deposit it with the government. The TCS provisions ensure the timely collection of tax on transactions, helping reduce tax evasion.

Key Concepts of TCS:

TCS Rates: Different goods have varying TCS rates as per government guidelines.

TCS Applicability: TCS is applicable on specific transactions, e.g., sale of scrap, minerals, etc.

TCS Filing: After collection, the seller must file returns detailing the amount of TCS collected.

TCS Setup in Tally: Configuring TCS Rates and Details

Step 1: Activating TCS in Tally Before recording TCS transactions, you need to activate the TCS feature in Tally ERP 9 or TallyPrime.

Go to Gateway of Tally > F11: Features > Statutory & Taxation.

Set Enable Tax Collected at Source (TCS) to Yes.

Configure necessary details like TCS Nature of Goods and respective TCS Rates.

Enable TCS Challan Numbers if applicable, and define the rates based on the tax law requirements.

Step 2: Configuring TCS Ledger

Create a TCS Ledger under Duties and Taxes.

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

Name the ledger, for example, "TCS on Scrap."

Select Duties & Taxes as the group and TCS as the tax type.

Define the Nature of Goods and the applicable rate based on the product or service.

Step 3: Configuring Party Ledger

When creating a party ledger for a buyer, ensure TCS applicability.

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

Select the party ledger (buyer) and enter their GSTIN and other tax details.

Enable TCS Applicable and specify the nature of transactions where TCS is applied.

TCS Transactions: Recording Transactions and Generating Reports for TCS

Once TCS is configured, you can proceed to record TCS-related transactions.

Step 1: Recording TCS Sales Transactions

Go to Gateway of Tally > Accounting Vouchers > F8: Sales.

Select the buyer’s ledger.

Select the relevant stock item for which TCS is applicable.

Tally will automatically calculate and add the TCS amount to the invoice based on the configured TCS rate.

Complete the invoice and save the transaction.

Step 2: Recording TCS Receipts After collecting TCS, you must record the receipt and deposit it with the government.

Go to Accounting Vouchers > F6: Receipt.

Select the TCS Ledger created for the particular transaction.

Record the amount collected as TCS and post the voucher.

Step 3: Generating TCS Reports To comply with legal requirements, businesses must generate TCS reports for filing.

Go to Gateway of Tally > Display > Statutory Reports > TCS Reports.

View detailed reports on the TCS collected, including the buyer details, nature of goods, and the amount of tax collected.

Generate TCS returns and challans for filing.

Practical Exercises and Lab Work

Exercise 1: TCS Configuration and Activation

Activate TCS in Tally using the steps mentioned in TCS Setup in Tally.

Configure TCS ledgers for various goods, such as scrap and minerals, with their respective rates.

Create party ledgers for customers, ensuring that TCS applicability is enabled.

Lab Example:

Configure a TCS rate of 1% for scrap and 0.75% for minerals.

Create a customer ledger for a buyer named "ABC Industries" with TCS enabled for scrap sales.

Exercise 2: Recording a TCS Sale Transaction

Record a sale of scrap worth ₹50,000 to "ABC Industries" and apply the TCS rate of 1%.

Tally should automatically compute a TCS of ₹500, bringing the total invoice amount to ₹50,500.

Save the invoice.

Lab Example:

Record the sale of 100 units of scrap priced at ₹500/unit to ABC Industries.

Verify that Tally correctly calculates and adds the TCS amount of ₹500.

Exercise 3: Generating and Filing TCS Reports

Generate a TCS report for the quarter showing the total TCS collected and details of the buyers.

Use the report to file TCS returns.

Lab Example:

After recording several sales transactions with TCS, generate a TCS report for the last quarter.

The report should display the total amount of TCS collected and the corresponding buyers’ details.

Conclusion

Managing TCS in a business is crucial for compliance with tax regulations. By configuring and recording transactions correctly in Tally, businesses can ensure they accurately collect, record, and file TCS with the government. This module covers essential aspects of TCS management, from setting up rates to recording transactions and generating statutory reports for return filing.

Through practical exercises and lab examples, learners can gain hands-on experience in managing TCS in a real-world scenario using Tally ERP 9 or TallyPrime.