TDS Payment Entry in Tally

By | April 11, 2026
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TDS Payment Entry in Tally

TDS Payment Entry in Tally

TDS Payment Entry in Tally

In Tally, recording a TDS payment typically involves two separate phases: deducting the tax from a vendor’s bill (booking the liability) and then remitting that tax to the government (statutory payment).

1. Booking TDS (Deduction from Party)

When you receive a bill from a vendor (e.g., for rent or professional fees), you record the expense and deduct TDS simultaneously using a Journal (F7) or Purchase (F9) voucher.
  • Path: Gateway of Tally > Vouchers > F7 (Journal)
  • The Entry:
    • Debit: Expense Account (e.g., Rent A/c) — Full bill amount
    • Credit: Party/Vendor Account — Net amount (Full amount minus TDS)
    • Credit: TDS Ledger (e.g., TDS on Professinal Fees Payable A/c) — TDS amount

2. Making Payment to the Party

After booking the expense, you pay the vendor the net amount.
  • Path: Gateway of Tally > Vouchers > F5 (Payment)
  • Debit: Party/Vendor Account
  • Credit: Bank or Cash Ledger

3. Statutory Payment (Remitting TDS to Government)

This is the final step to clear your TDS liability. TallyPrime provides a dedicated “Stat Payment” helper to automate this.
  • Path: Gateway of Tally > Vouchers > F5 (Payment)
  • Action: Press Alt+J (Stat Payment) or click S: Stat Payment on the right sidebar.
  • Details to Fill:
    1. Tax Type: Select TDS.
    2. Period: Enter the “From” and “To” dates for the month/quarter.
    3. Deducted Till Date: Usually the last day of the payment month.
    4. Section & Nature: Choose the specific section (e.g., 194J under Income tax Act 1961/ ) and Nature of Payment.
    5. Deductee Status: Select “Company” or “Non-Company” as per the vendor type.
    6. Cash/Bank: Select your bank ledger.
Tally will auto-fill the amount based on the pending TDS liability for that period.

Summary of Ledger Setup

To make these entries work correctly, ensure your ledgers are configured as follows:
Ledger [12, 13, 14, 15, 16]GroupTDS Configuration
Vendor A/cSundry CreditorsSet “Is TDS Deductable” to Yes and select Deductee Type.
TDS A/cDuties & TaxesSelect “Type of Duty/Tax” as TDS and choose the Nature of Payment.
Expense A/cIndirect ExpensesSet “Is TDS Applicable” to Applicable and choose the Nature of Payment.
Would you like a step-by-step guide on how to reconcile the TDS challan once the payment is made?
Refer https://help.tallysolutions.com/tds-transactions-tally/