How to Record TDS Under Section 194Q on Purchase in TallyPrime | TallyHelp

Tally Solutions

8 Aug 202407:36

Summary

TLDRThis video tutorial guides you through the process of deducting TDS on purchases under Section 194Q, as introduced in the Finance Bill 2021. It explains the conditions under which TDS must be deducted, including turnover and transaction thresholds, and the applicable tax rates. The video also demonstrates how to configure these settings in Tally Prime 5.0, covering the creation of a TDS payment master, recording purchase vouchers, and handling transactions that exceed the threshold limit. Practical steps and tips for automating TDS deductions in Tally Prime are provided.

Takeaways

📘 Welcome to the tutorial on deducting TDS under Section 194K for financial year 2021-22 as per the Finance Bill, 2021.
🔍 TDS is mandatory on payments made to resident payers for goods exceeding Rs. 10 lakhs in a financial year under Section 194K.
📈 The tax rate for deducting TDS is 1% if the seller is PAN and Aadhaar linked, and 5% if not linked.
📋 The bill also states the requirement for deducting TDS on the value above the threshold limit of Rs. 50 lakhs.
👨‍💼 For calculating TDS, use 0.1% if the seller is PAN and 5% if the seller is not PAN.
🏢 The process involves creating a structure for payment under Section 194K with a threshold limit of Rs. 50 lakhs.
📝 To handle deductions, navigate to the 'Create and Select TDS Nature of Payment' under the 'TDS Nature of Payment' section.
🔢 Enter details such as name, payment code, and applicable rates for individuals, HUF, and other deductee types.
💼 Confirm the payment details and calculate TDS on the value exceeding the limit to deduct TDS on payments exceeding the threshold limit of Rs. 50 lakhs.
🔗 The script guides on recording vouchers, crossing the threshold limit with TDS under Section 194K, and viewing the tax breakup.
📊 It explains how to calculate TDS at normal rates, allocate, and deduct TDS in Form 26Q, and record advance payments to parties.
📋 The script also covers the process of confirming payment vouchers, selecting the party ledger with TDS applicability, and entering the name, quantity, rate, and GST details.
📈 The total payable value has crossed the threshold limit of Rs. 50 lakhs, and TDS is calculated on the amount exceeding Rs. 50 lakhs.
📊 For TDS under Section 194K, the exemption value here is Rs. 10 lakhs because Rs. 40 lakhs is already adjusted in the previous transaction.
🔄 The script provides a step-by-step guide on how to handle TDS deductions, including navigating back to the voucher screen and saving the voucher.
📝 It concludes with information on the automation of TDS under Section 194K in Tally Prime for recording advance payments and journal vouchers.

Q & A

What is the main topic of the video script?
-The main topic of the video script is about deducting TDS (Tax Deducted at Source) under Section 194C of the Finance Bill, 2021, and how to handle it in the Tally Prime software.
What is the threshold limit for deducting TDS under Section 194C?
-The threshold limit for deducting TDS under Section 194C is Rs. 50 lakhs for a financial year.
What are the rates at which TDS should be deducted if the seller is a PAN holder and if not?
-If the seller is a PAN holder, TDS should be deducted at 0.1%, and if the seller does not have a PAN, TDS should be deducted at 5%.
What is the purpose of mentioning TDS under Section 194C in the video script?
-The purpose is to educate viewers on how to calculate and deduct TDS on payments exceeding the threshold limit of Rs. 50 lakhs under Section 194C and to comply with the financial regulations.
What are the details that need to be filled in the TDS section in Tally Prime for Section 194C?
-The details required include the name, payment code, PAN details, and the tax rate applicable for individuals and other deductee types.
How can one calculate TDS on payments exceeding the threshold limit in Tally Prime?
-In Tally Prime, one can calculate TDS by enabling the option to calculate tax on value exceeding the limit and then pressing Control + T to save the TDS nature of payment.
What is the process of recording a voucher crossing the threshold limit with TDS under Section 194C in Tally Prime?
-The process involves selecting the party ledger with TDS applicability, under the purchase ledger, selecting the common purchase ledger, confirming the name of the item, quantity, and rate, selecting the GST ledgers to view the detailed tax breakdown, and pressing Control + O to TDS tax analysis and F5 to view the assessable value and tax.
How can one view the tax analysis and assessable value in Tally Prime?
-To view the tax analysis and assessable value, press Control + O for TDS tax analysis and then press Alt + F5.
What are the steps to record a TDS voucher in Tally Prime?
-The steps include creating and selecting the TDS nature of payment, entering the name, section, and payment code, filling in the auto-enter and applicable details under the rate for individuals, and pressing Control + A to save the voucher.
How does Tally Prime automate the allocation and deduction of TDS in Form 26AS?
-Tally Prime automates the allocation and deduction of TDS by recording advance payments to parties and also in journal vouchers, making the process efficient and accurate.
What is the significance of recording TDS in journal vouchers in Tally Prime?
-Recording TDS in journal vouchers in Tally Prime helps in maintaining accurate financial records and ensures compliance with tax regulations, making it easier to track and manage tax liabilities.

Outlines

00:00

🛡️ Introduction to TDS on Purchases Under Section 194Q

This paragraph introduces the video, which focuses on how to deduct TDS (Tax Deducted at Source) on purchases under Section 194Q using Tally Prime 5.0. It provides an overview of Section 194Q as per the Finance Bill 2021, explaining the criteria for TDS deduction, including the threshold limits and applicable tax rates. The paragraph also mentions that certain entities like government bodies, e-commerce operators, and NRIs are exempt from TDS under this section. The paragraph sets the stage for a detailed walkthrough on handling these provisions in Tally Prime.

05:02

💼 Configuring and Recording TDS in Tally Prime

This paragraph delves into the practical steps for managing TDS under Section 194Q in Tally Prime 5.0. It describes the process of creating a TDS master, configuring the threshold limit of ₹50 lakh, and setting up the nature of payment for Section 194Q. The paragraph guides users through recording a purchase voucher under and above the threshold limit, including selecting the relevant ledgers and viewing tax breakups. It emphasizes the automation features in Tally Prime that help in calculating and deducting TDS, ensuring compliance with the provisions of Section 194Q.

Mindmap

Keywords

💡TDS

TDS stands for Tax Deducted at Source, which is a system in India where tax is deducted at the time of payment for certain transactions. In the video, TDS is the central theme, discussing the process and rules for deducting tax under Section 194K for financial transactions.

💡Section 194K

Section 194K refers to a specific provision in the Indian Income Tax Act that mandates the deduction of tax at source on certain specified transactions. The video script discusses the implications of this section for transactions exceeding the threshold limit of 50 lakhs.

💡Threshold Limit

The threshold limit in the context of TDS under Section 194K is the maximum amount up to which tax does not need to be deducted. The script mentions a threshold limit of 50 lakhs, beyond which TDS must be deducted.

💡E-commerce Operators

E-commerce Operators are entities that run online marketplaces. The script refers to the TDS obligations of such operators under Section 194K when they facilitate transactions that meet or exceed the threshold limit.

💡Payment Vouchers

Payment vouchers are documents that record the payment details in a transaction. The script instructs on how to handle payment vouchers when TDS is applicable under Section 194K.

💡

💡Tax Rate

The tax rate mentioned in the script refers to the percentage of tax that must be deducted at source for transactions covered under Section 194K. It specifies different rates for sellers with and without PAN (Permanent Account Number).

💡PAN (Permanent Account Number)

PAN is a unique, ten-character alphanumeric identifier issued to taxpayers in India. The script differentiates the TDS rate based on whether the seller has a PAN or not.

💡GST (Goods and Services Tax)

Although not explicitly mentioned, the mention of 'GST ledgers' in the script implies the integration of TDS with GST, which is a comprehensive tax levied on the supply of goods and services in India.

💡Form 26AS

Form 26AS is a document provided by the Indian Income Tax Department that contains details of all tax-related transactions reported by taxpayers. The script suggests using Form 26AS to verify the TDS deducted under Section 194K.

💡E-Commerce

E-commerce refers to the buying and selling of goods or services using the internet. The script discusses the role of e-commerce operators in the context of TDS under Section 194K, especially when dealing with large transactions.

💡Tax Deduction

Tax deduction in the script pertains to the process of withholding tax at the source of income. It is a key action that needs to be performed when the transaction amount exceeds the specified threshold limit under Section 194K.

💡Telecom Circle

Telecom Circle refers to a geographical division used by telecom operators for operational purposes. The script mentions the creation of a 'Telecom Circle' for managing TDS payments under Section 194K.

Highlights

Introduction to deducting TDS on e-commerce under Section 194K in the Finance Bill, 2021.

TDS is mandatory if the annual turnover exceeds 10 crores in the previous financial year.

TDS under Section 194K is applicable if payment to e-commerce operators exceeds 50 lakhs.

Calculation of TDS at 0.1% if the seller is PAN and at 5% if the seller is without PAN.

Bills must state the identity of government e-commerce operators and TDS deducted.

How to handle provisions in Prime 5.0 for TDS under Section 194K.

Creating a structure for TDS payment under Section 194K with a threshold limit of 50 lakhs.

Entering details automatically under the rate for individuals, U/F, and other deductee types.

Setting tax rates for PAN at 0.1% and without PAN at 5%.

Configuring TDS under Section 194K, including the threshold limit of 50 lakhs.

Recording vouchers and payment vouchers crossing the threshold limit with TDS.

Viewing the list of payment types and selecting Section 194K for entering details.

Entering the name, payment code, and auto-entering applicable details under the rate.

Navigating the most important configurations for TDS under Section 194K.

Entering the threshold limit and enabling options to calculate tax on value exceeding the limit.

Pressing Control + T to save the TDS payment structure.

Recording vouchers crossing the threshold limit with the TDS payment structure.

Selecting the party ledger with TDS applicability and viewing the common payment ledger.

Confirming payment details and pressing Enter to record the payment voucher.

Entering the name of the item, quantity, rate, and selecting GST and TDS ledgers.

Viewing the detailed tax breakdown by pressing Control + O for TDS tax analysis.

Pressing Alt + F5 to see the taxable value and tax rate.

Escaping to go back to the voucher screen if needed and saving the voucher.

Recording vouchers crossing the threshold limit with the TDS payment structure under the party account name.

Selecting the party ledger with TDS applicability and the common payment ledger.

Confirming the name of the item, quantity, rate, and selecting GST and TDS ledgers for the total pack value.

Viewing the detailed tax breakdown and pressing Control + O for TDS tax analysis.

Pressing Alt + F5 to see the assessment value, tax rate, and tax value.

Automation of TDS allocation and deduction in Form 26AS at normal rates.

Confirmation of payment and noting the date for TDS automation in Tally Prime.

Learning about the deduction under TDS Section 194K and how to manage TDS in Tally Prime through the video linked in the description.