TDS on Advance Payments

In case of Advances, payment (to the party) is made after deducting the applicable TDS.

Example: ABC Company made an advance payment of Rs.10,000 to Pheonix Agencies towards Advertisement Expenses, which will be adjusted against the bill of Rs.20000. TDS is deducted while making the payment.

Step 1: Create Bank Ledger

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

 

 

Step 2: Create Payment Voucher

To create a Payment Voucher

Go to Gateway of Tally > Accounting Vouchers > F5: Payment.

Set up

In F12: configure (Payment Configuration)

  1. Press F2 and change the date to 24-04-2009.

  2. In Account field select Canara Bank.

  3. Under Particulars select Pheonix Agencies.

  4. Enter Rs.10,000 in the Amount field.

  5. In Bill-wise Details screen:

 

  1. Under Particulars select the Duty Ledger TDS – Contractors from the List of Ledger Accounts

  2. In TDS Details screen

  3. In Type of Ref field select New Ref

  4. In Name field accept the default Reference Number –Pymt / 1-1

  5. In Nature of Payment field select Payment to Contractors (Advertisement Contractors)

  6. TDS Duty Ledger, Assessable Amount and TDS Amount field details are defaulted automatically, based on the information provided in the voucher.

 

  1. In the Amount field the TDS amount (Rs. 100) is displayed with negative sign.

  2. Enter Narration, if required.

 

  1. Press Enter to accept and save.

Note: Advance payments can also be accounted in Double Entry mode.