Income Tax in Tally ERP 9
Home
/
/ Income Tax in Tally ERP 9
Income Tax in Tally ERP 9
Introduction (Income-Tax)
Assessment Year
Previous Year
Assessee
every person in respect of whom any proceeding under this Act has been taken for the assessment of his income 25[or assessment of fringe benefits] or of the income of any other person in respect of which he is assessable, or of the loss sustained by him or by such other person, or of the amount of refund due to him or to such other person
every person who is deemed to be an assessee under any provision of this Act
every person who is deemed to be an assessee in default under any provision of this Act
Person
an individual
a Hindu Undivided family
a Company or organisation
a firm
an association of persons or a body of individuals
a local authority
Total Income
i. Total Income for Resident
is received or is deemed to be received in India in such year by or on behalf of such person
accrues or arises or is deemed to accrue or arise to him in India during such year
accrues or arises to him outside India during such year
ii. For Non Resident Indian
is received or is deemed to be received in India in such year by or on behalf of such person
accrues or arises or is deemed to accrue or arise to him in India during such year.
Gross Total Income
Salary as per provisions contained in Section 17(1): Includes all earning pay com¬ponents.
Value of Perquisites u/s 17(2) (as per Form 12BA): Includes all perquisites (Non-Monetary Benefits) values paid to the employees.
Profits in lieu of Salary u/s 17(3) (as per Form 12BA): Includes Any compensation paid to the employees in connection with termination, modification of terms of employ¬ment, amount paid prior to employment etc.
Allowances exempted U/s 10
Allowance provided to the Employees working in transport system
Border Remote area allowance
Children education allowance (for a maximum of two children)
Children Hostel Expenditure Allowance (for a maximum of two children)
Conveyance Allowance
Counter Insurgency Allowance - provided to the members of armed forces operating in areas away from their permanent locations
Field Area Allowance - Compensatory field area allowance provided in various areas of
Arunachal Pradesh, Manipur, Nagaland, Sikkim, HP, UP and J&K.
Gratuity - paid at the time of retirement
High Altitude Allowance
Highly Active Field Area Allowance
House Rent Allowance
Island Duty Allowance
Leave Encashment on Retirement
Leave Travel Allowance
Medical Reimbursement
Mining/Underground Allowance
Modified Field Area Allowance
Retrenchment Compensation - A Compensation given to workers at the time of closing down of Undertaking or transfer
Tribal Scheduled Area Allowance
Voluntary Retirement Allowance
Deductions U/s 16
Entertainment Allowance - Entertainment allowance specially granted to an employee who is in receipt of Salary from Government.
Professional Tax - Tax on Employment
Other Income Declared by Employee
Deductions Under Chapter VI-A
Investments U/s 80C, 80CCF - all the investments such as Insurance, Mutual funds, House loan principal amount etc. are considered as eligible investment for the computation of Taxable income.
Other expenses U/s 80D, 80DD, 80E etc.- Other expenses such as Mediclaim, Dona¬tions, payment of interest on loan for higher education etc. are allowed as other deductions for the computation of Taxable Income.
Relief U/s 89,90,91
Taxable Income
Lesson 1: Configuring Income Tax
Set the option Set/Alter Payroll Statutory Details to Yes
Under Income Tax section,
Specify your Company’s TAN in the Tax Assessment Number field
Specify the Income Tax ward details in the Income Tax Circle/Ward field
Select the required Deductor Type based on the type of organisation from the List of Company Type
Specify the name of person who is responsible for deducting Income Tax in Name of Person responsible field
Specify the fathers name for the person responsible for deducting Income Tax in Son/daughter of field
In Designation field specify the formal designation of the person responsible for deducting Income Tax.
Figure 1.1 Payroll Statutory Details
Press Enter accept and save.
Lesson 2: Income Tax Master Configuration
Pay Head Configuration
Income Tax Configuration
Employee Declarations
Declaring Previous Employer Income/Details
Override Income Tax Exemption Value
Override Income Tax Value
2.1 Pay Head Configuration
Example 1:
Spectrum Software Services is already using Tally.ERP 9 Payroll and has the following Pay Heads:
Bonus is also Paid to the Employees using normal Payment Voucher using the Bonus Ledger.
Move the cursor to the required Pay Head using up and down arrow keys and press Enter
In the Income Tax Configuration screen,
Select the required Income Tax Component Type for the selected Pay Head as shown:
Figure 2.1 Income Tax Configuration - Income Tax Component selection
Select the required Method of Calculation from Projected or On Actuals
Deduct TDS across Period(s) will be defaulted to Yes for all Projected Pay Heads
Figure 2.2 Completed Income Tax Configuration screen
Press Enter to accept and save.
Completed Income Tax Configuration for Children Education Allowance Pay Head is as shown:
Figure 2.3 Completed Income Tax Configuration screen
Figure 2.4 Completed Income Tax Configuration screen
Figure 2.5 Completed Income Tax Configuration screen
Click on A: Add Ledger or press Alt+A button
Select the required Ledger from the List of Ledgers
Figure 2.6 List of Ledgers
Select the required parameters in the Income Tax Configuration screen
Figure 2.7 Income Tax Configuration for Bonus Ledger
Figure 2.8 Pay Head Configuration screen - completed
2.2 Employee’s Income Tax Declarations
Example 2:
Spectrum Software Services collected the Income Tax Declaration details for all the Employees on 15.4.2010.
2.2.1 Rent Declaration for House Rent Allowance
Example 3:
The HRA details as declared by the Employees is given below:
Under Exemptions, select Rent and Place of Accommodation and press Enter
Figure 2.9 Income Tax Declaration screen
In the Employee Filter sub screen, select All Employee
Figure 2.10 Employee Filter screen
In the House Rent Declaration screen,
Specify the Effective From date as 1.4.2010
Enter Rent Declared as 5000
Rent Proof field can be skipped while entering the declaration
Select Non-Metro as Place of Residence for Bangalore city
Figure 2.11 Completed House Rent Declaration screen
Example 4:
The details required for Child Education Allowance, as given by the Employees are shown below:
Figure 2.12 Completed Child Education Allowance screen -1
2.2.2 Declaration of Investments U/s 80C & 80CCF
PPF
ELSS - Mutual Funds
NSC
KVP
Life Insurance
Senior Citizen Saving Scheme 2004
Post Office Time Deposit Account
etc...
Example 5:
Below is the list of Investment Details as provided by the Employees for Deductions under 80C & 80CCF:
Bring the cursor to Multi Employee Single Component under Investments (80C and 80CCF) and press Enter
Select All Items under Employee Name/Group
Select Type of Investment under Housing Loan Repayment and press Enter
Figure 2.13 Investment Details
In the Investment Details screen,
For Ajay, specify the Effective From date as 1.4.2010
Specify the Declared Amount as 50,000
Proof Amount field can be skipped while entering the declaration
Figure 2.14 Investment Details
Insurance Premium Declaration
Figure 2.15 Insurance Premium - Investment Details
Long Term Infrastructure Bonds Declaration (Sec 80CCF)
Figure 2.16 Investment Details - Long term Infrastructure bonds
2.2.3 Other Deductions (U/s 80D, 80DD, 80E etc.)
Example 6:
Below is the list of Investment Details as provided by the Employees for Deductions under section 80D, 80DD, 80E etc.
Bring the cursor to Multi Employee Single Component under Others (80D, 80DD, 80E etc.) or press Alt+O
In the Effective From field specify 1-4-2010
Select Others in the Condition field from the List of Categories
Specify required Amount in the Declared Amount field for each Employee
Proof Amount can be specified later when the Employees provide the required proofs
Figure 2.17 Chapter VI - Other deductions for Mediclaim Insurance
2.3 Override Income Tax
1.Allow to specify different Income and Exemption slabs for different Employees as they can dif¬fer based on the place of duty or based on the type of work. e.g. high altitude allowance differs based on the height (from sea level) of work place.
2.It also provides the flexibility to enter the already earned values without using the payroll mod¬ule and now the tax can be computed on the entire value
3.It also allows you to override the tax computation which is done by Tally.ERP 9. This can be used if an Employee has got any special permission from the accessing officer for lesser deduction.
2.4 Tax Configuration
Bring the cursor to House Rent Allowance under Allowance to the extent exempt u/s 10 as shown:
Figure 2.18 Tax Configuration screen
Press Enter to view the Income Tax Allowance Setup (Setup Helper)
Figure 2.19 Income Tax Allowance Setup
i. HRA Configuration
Press Enter on Configure Pay Head/Ledger for House Rent Allowance
Figure 2.20 Pay Head Configuration for HRA
ii. HRA Declaration
Press Enter on Rent and Place of Accommodation
Figure 2.21 House Rent Declaration screen
2.5 Previous Employer Details
2.6 Pay Head Creation for Income Tax Deduction
2.6.1 Creating Income Tax Pay Head
Specify the Name of Pay Head as TDS
Select Employees’ Statutory Deduction from the List of Pay Heads
Select Statutory Pay Type as Income Tax from the list as shown:
Figure 2.22 Pay Head creation - Statutory Pay Type selection
In the field Under select Current Liabilities as the Group
Set the option Affect Net Salary to Yes
Specify the required caption for the Pay Head in Name to appear in Payslip field
Calculation Type is defaulted with As Per Income Tax Slab
Select Month as the Calculation Period
Rounding Method and Limit are defaulted for the Income Tax Pay Head Creation
Figure 2.23 Completed Income Tax Pay Head creation
Press Enter to accept and save.
2.6.2 Create/Alter Salary Details
Select the required Employee (Mahesh) and press Enter
In the Salary Details screen, bring the cursor at the end and select TDS Pay Head to add
Press End of List
Figure 2.24 Salary Details Alteration screen
Press Enter to accept and save
Lesson 3: Processing Payroll
Recording of Attendance and Production details (on time / work)
Processing Payroll Vouchers
Payment of Salaries and other statutory payments
3.1 Recording Attendance
Example 1:
On 30th April, 2010 the attendance records of M/s. Spectrum Software Services displayed the following details:
Press Ctrl+F5 for Attendance Voucher
Figure 3.1 Attendance Voucher Creation screen
Press F2 and specify the date as 30-4-2010
Press Enter
Press Alt+A (Attendance Auto Fill) to pre-fill employee payroll details
In the Attendance Auto Fill screen,
Specify the Voucher Date as 30-04-2010 if not specified earlier
Select Primary Cost Category as All Items (If separate cost categories are used to capture employee cost, then select the respective Employee category)
Select All Items as Employee/ Group (if you want to generate payroll voucher for indi¬vidual employee/ group, select the respective employee or group)
Select Absent as Attendance Type in the Attendance/ Production Type field
Specify the require value that should be prefilled for all Employees e.g. 0
Figure 1.2 Attendance Auto Fill screen
Press Enter to accept the screen
Figure 1.3 Attendance Voucher
Specify the attendance details as given in the table above
Figure 3.4 Completed Attendance Voucher Screen
1.Press Enter to accept the completed Attendance Voucher screen.
Figure 3.5 Attendance Voucher Screen - Overtime
Press Enter to accept.
3.2 Processing Payroll Vouchers
Example 2:
On 30th April, 2010, M/s. Spectrum Software Solutions processes Payroll for all the employees and entitled the following employees for Variable Pay.
3.2.1 Processing User Defined Pay Heads
1.Press Ctrl+F4 for Payroll Voucher
2.Press F2, specify the date as 30-4-2010 and press Enter
3.Press Alt+A (Payroll Auto Fill) to pre-fill employee payroll details
In the Payroll Auto Fill screen,
Select User Defined Pay Heads in the Process for field
Specify 1-4-2010 in the From field
Specify 30-4-2010 in the To field
Select All Items as Employee/Group
Select Salary Payable in the Payroll Ledger field
Figure 1.6 Payroll Autofill with payment Ledger list
Press Enter to accept the screen
Specify 1000 as Variable Pay for Mahesh
Similarly, specify 1500 as Variable Pay for Vijay Kumar and press Enter
Figure 3.7 Completed Payroll Voucher
4.Press Enter to accept.
3.2.2 Processing Salary with Income Tax Deduction
1.Press Ctrl+F4 for Payroll Voucher
2.Press F2, specify the date as 30-4-2010 and press Enter
3.Press Alt+A (Payroll Auto Fill) to pre-fill employee payroll details
In the Payroll Auto Fill screen,
Select Salary in the Process for field
Select Declared Value in the Compute Income Tax based On field as shown:
Figure 1.8 Payroll Auto Fill screen
Select all other parameters as explained earlier
Figure 1.9 Completed Payroll Auto Fill
Press Enter to pre-fill the Payroll Voucher with all Pay values for all Employees includ¬ing Income Tax deduction (TDS)
Figure 3.10 Completed Payroll Voucher
Press Enter to accept.
3.2.3 Processing Payments
Example 3:
On 30th April 2010, M/s. Spectrum Software Solutions paid the salaries due for the month of April 2010. The PF, ESI, PT and Income Tax were also paid on 30th April 2010.
Press F2, specify the date as 30-04-2010 and press Enter
Press Alt+A (Payroll Auto Fill) to pre-fill employee payroll details
In the Payment Auto Fill screen,
select Income Tax Challan in the Process for field as shown.
Specify 01-04-2010 as From period
Specify 31-04-2010 as To period
Specify Voucher Date as 30-04-2010
Select Primary Cost Category in the Employee Category field
Select All Items in the Employee/Group field
Select HDFC Bank in the Bank / Cash Ledger field as shown.
Select Salary Payable in the Payroll Ledger field
Figure 3.11 Payment Auto Fill screen
Press Enter and the employee Income Tax details will appear by default as shown:
Figure 1.12 Payment Voucher
Set Provide Details to Yes
In the Provide Details screen,
In Cheque / DD No field, specify the correct cheque or DD number (e.g. 23342)
In Cheque / DD No field, specify the date of Cheque or DD (e.g. 30.04.2010)
Specify name of depositor (e.g. Ramesh) in Depositor Name field
In Bank & Branch Code field, specify the Bank Name and Branch Details (e.g. HDFC & Koramangala)
In BSR Code field, specify the banks BSR code
Specify 30.4.2010 as Challan Date
Specify 4343338 in the Challan Number in number field
The completed Payment Details screen is displayed as shown:
Press Enter to accept the Provide Details screen
Figure 3.13 Payment Voucher
4.Press Enter to accept.
Press Page Up in the Accounting Voucher Alteration screen and press Alt+P
In the Payment Voucher print configuration screen,
Set Print Challan to Yes as shown:
Figure 1.14 Voucher Printing configuration
Print Enter to print Challan
Figure 1.15 ITNS 281 Challan
Lesson 4: Income Tax Reports
Computation Report
Salary Projection
Challan Reconciliation
Returns
Quarterly
Form 24Q
Annexure I to 24Q
Annexure II to 24Q
Annual
Form 16
Form 12BA
ITR-1
e-Return
E-24Q
Print Form 27A
Exception Reports
PAN Not Available
Other Records
TDS Variance
4.1 Computation Report
Figure 4.1 Employee Selection screen
Select the required Employee and press Enter
Figure 4.2 Income Tax Computation report
Figure 4.3 Income Tax Computation
Press F3 or click on F3: Show all button from Income Tax Computation screen
Figure 4.4 Income Tax Computation sheet with all Components
Press F5 or click on F5: Proof Value button from Income Tax Computation screen
Figure 4.5 Tax Computation based on Proof Value
Bring the cursor on press F5 or click on F5: Proof Value button from Income Tax Computa-tion screen
Figure 4.6 HRA Computation
4.1.1 Salary Projection
Select the required Employee and press Enter
Figure 4.7 Salary Projection
4.2 Challan Reconciliation
Figure 4.8 Challan Reconciliation
Press F5 to reconcile and specify the updated Challan details
Figure 4.9 Challan Reconciliation
Press Enter to accept the updated details
4.3 Returns
Quarterly
Form 24Q
Annexure I to 24Q
Annexure II to 24Q
Annual
Form 16
Form 12BA
ITR-1
4.3.1 Form 24Q
Specify the Name, Designation and Address of the person responsible for deducting the TDS along
Select the Quarter which the TDS returns have to filed
Specify the Date and Place.
Figure 4.10 Printing Form 24 Q Screen
Press Enter to Print Form 24Q
Figure 4.11 Form 24Q - Page 1
Figure 4.12 Form 24Q - Page 2
4.3.2 Annexure I to 24Q
Figure 4.13 Printing Form 24Q - Annexure I
Press Enter to print Annexure I to Form 24Q
Figure 4.14 Form 24Q - Annexure I
4.3.3 Annexure II to 24Q
Figure 4.15 Printing Form 24Q – Annexure II
?Press Enter to print Annexure II to Form 24Q
Figure 4.16 Form 24Q - Annexure II
Figure 4.17 Form 24Q - Annexure II
Figure 4.18 Form 24Q - Annexure II
Figure 4.19 Form 24Q - Annexure II
4.3.4 Form 16
Select the required Employee from the List of Employees and press Enter
Specify the following details:
Name: Specify the name of the person responsible for Income Tax Deduction.
Son/Daughter of: Specify the father’s name for the TDS Deductor
Designation: Specify the designation of the person responsible for TDS Deduction
From: By default displays 1-4-2010 which can be changed.
To: Enter the To date (by default it will be 31.03.2011)
Challan Date Till: In this field enter the date to consider the challan payments made.
Type of Copy: Specify Original or Duplicate as required
Place: Enter the name of the Place (e.g. Bangalore)
Date of Printing: Specify the Date of issue of Form 16
Quarter/Acknowledgement: Mention the acknowledgement number of the TDS returns filed against the appropriate Quarter.
CIT (TDS) Details: In this section enter the address of the Commissioner of Income Tax having jurisdiction for TDS deduction for the assessee.
Address: Enter the address of the commissioner office
City: Mention the City name
Pin Code: Enter the PIN Code.
Figure 4.20 Form 16 - Print Configuration screen
Press Enter to print Form 16 for the selected Employee
Figure 4.21 Form 16 - Page 1
Figure 4.22 Form 16 - Page 2
4.3.5 Form 12BA
4.3.6 ITR-1
Select the required Employee from the List of Employee and press Enter
Figure 4.23 Print Configuration for ITR-1
Press Enter to print the ITR-1
Figure 4.24 ITR-1 Page 1
Figure 4.25 ITR-1 Page 2
Figure 4.26 ITR-1 Page 3
4.4 E-Return
E-24Q
Print Form 27A
Figure 4.27 E-Return Menu
4.4.1 E-24Q
By default, the Language and Format is preset as Restricted (ASCII Only) and SDF (Fixed Width) respectively.
In Export Location field enter the details of the path to where the txt file to be exported
In Output File Name field the test file name will be displayed as ITeTDS.txt which can be changed by the users.
Press Enter to accept the Person Responsible Details (The Address details are automat-ically defaulted from the Company masters in the Person Responsible Details column)
As per the new E-return structure it is must to specify either Mobile Number or STD Code with Telephone number in E-24Q file.
Mobile Number: This field is provided to specify the mobile number of the assessee
STD Code: This field is provided to enter the STD code
Telephone: This filed is provided to enter the telephone number of the assessee
In Email field enter mail ID of Person responsible for income tax deduction and payment to the income tax department.
Select Yes or No as applicable, in Is Change in Address since last Return field.
Under Other Details,
Type of Deductor details will be captured form the TDS Details defined in F11: Fea¬tures.
In Category (deductor/Collector) field select the Deductor Category. e.g. Associa¬tion of Person (AOP)
In Quarter Period for field select the appropriate Quarter for which the e-return to be generated.
Figure 4.28 Quarterly Return Configuration Screen
Press Enter to Export Quarterly Return in 26Q
Figure 4.29 Exported File in Tally.ERP 9 Folder
4.4.2 Print Form 27A
Accept the Person Responsible and Address details (The Address details are automati-cally defaulted from Company master)
In Quarter Period for field select the appropriate quarter from the Period list
Type of Deductor details will be captured form the TDS Details defined in F11: Features
Specify the Place and Date of filing returns
Figure 4.30 Printing Form 27A Screen
Press Enter to Print Form 27A
Figure 4.31 Print Form 27A
4.5 Exception Reports
PAN Not Available
Other Records
TDS Variance
4.5.1 PAN Not Available
Figure 4.32 PAN Not Available -1
Press F5 (F5: All Items) to view all the Employees PAN details a shown:
Figure 4.33 PAN Not Available - All Employees
Specify the PAN Details for all the Employees for which PAN is not entered
Figure 4.34 Completed PAN Not Available screen
Press Enter to save the details.
4.5.2 Other Records
Figure 4.35 Employee Other Records
4.5.3 TDS Variance
Select the required Employees or All Employees and press Enter
Figure 4.36 TDS Variance report
For more details on usage and description of each field, refer to Help file (Tally.ERP 9 Reference Manual).
Support/Help
Contact Us
- Address:
Tally Academy http://www.tallyonlinetraining.com/ - Mobile: +91-9214493851
- E-mail: support@tallyonlinetraining.com
Bank Details
- M/S SOFTCOM COMPUTER INSTITUTE
- ICICI BANK
- SUBZI MANDI,KOTA-(RAJ.)-324005
- AC.NO.: 688305023877
- RTGS/NEFT/IFSC CODE: ICIC0006883
- Branch: Subji Mandi Kota(Raj) India
- OR IN THE CASE OF D.D. IS IN FAVOUR OF "SOFTCOM COMPUTER INSTITUTE" PAYABLE AT - KOTA (RAJ.)
Have any Questions
If you have any questions, feel free to call us
Contact No:
+91-9214493851
10AM-7PM (Working Days)
Copyright © 2015 tallyonlinetraining.com All rights reserved.