{"id":32370,"date":"2022-08-05T13:26:18","date_gmt":"2022-08-05T07:56:18","guid":{"rendered":"https:\/\/www.techjockey.com\/blog\/?p=32370"},"modified":"2025-12-23T14:11:04","modified_gmt":"2025-12-23T08:41:04","slug":"tds-entry-in-tally","status":"publish","type":"post","link":"https:\/\/www.techjockey.com\/blog\/tds-entry-in-tally","title":{"rendered":"Step By Step Guide to Make TDS Entry in Tally (with Practical Examples)"},"content":{"rendered":"\n

(Tax Deducted at Source) TDS is one of the most common entries to be passed while receiving and making payment. It involves proper calculation, posting it in the right ledger, and reconciliation. In this post, we will guide you in passing TDS entry in Tally. We will provide practical examples for TDS Journal entry in Tally ERP<\/a> 9 and Tally prime.<\/p>\n\n\n\n

Before we get into the steps of passing Tally entry of TDS, let\u2019s understand the concept of TDS receivable and payable.<\/p>\n\n\n\n

Note:<\/strong> If you exactly know about TDS, TDS rates, calculations and posting, you can directly jump to the Steps section.<\/em><\/p>\n\n\n\n

<\/span>What is TDS (Tax Deducted at Source)?<\/span><\/h2>\n\n\n\n

Tax Deducted at Source (TDS) is a pre-tax deduction made at source (before payment) by the payer from the payment made to the payee. It is a mechanism of collecting tax by using a deduction mechanism rather than through payments made by the taxpayer. It is deducted at the time of payment, and directly deposited into the government (Income Tax Department’s) account.\u202f<\/p>\n\n\n

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\"Kaspersky<\/a><\/figure><\/div>\n\n\n

There are generally two types of TDS in Books of Accounts: TDS Payable and TDS Receivable. We will understand both these TDS entries in TallyPrime with examples.<\/p>\n\n\n\n

Suggested Read: How to Record Sales & Purchase Entry in Tally with GST<\/a><\/strong><\/p>\n\n\n\n

<\/span>TDS Payable<\/span><\/h3>\n\n\n\n

It\u2019s the amount which you are required to deduct from the total payable amount to the service provider, contractor, professional, and then deposit to Income Tax department as tax on behalf of the payee.<\/p>\n\n\n\n

It\u2019s held on behalf of the Payee therefore it appears on the liability side of the balance sheet. Let’s see the TDS payable entry below:<\/p>\n\n\n\n

Debit Account<\/strong><\/td>Credit Account<\/strong><\/td>Particulars<\/strong><\/td><\/tr>
To Expense A\/c<\/td>\u2013<\/td>(Total Amount)<\/td><\/tr>
\u2013<\/td>To Vendor\/Supplier A\/c<\/td>(Amount to be Paid)<\/td><\/tr>
\u2013<\/td>To TDS Payable A\/c<\/td>(TDS Amount)<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

This must be confusing, let\u2019s try to understand through a practical TDS example<\/strong><\/p>\n\n\n\n

Consider yourself as a hospital entity. Suppose you need to pay a sum of \u20b91,00,000 to a doctor who provides professional medical services at your hospital.<\/p>\n\n\n\n

Now as per the Finance Act, you should pay only \u20b990,000 to the doctor after deducting \u20b910,000 (at the rate of 10% on the total amount payable.) You need to deposit this 10,000 directly to the Income Tax department’s bank account on behalf of the doctor.<\/p>\n\n\n\n

Note:<\/strong><\/p>\n\n\n\n