Value Added Tax(VAT) in Tally

Value Added Tax(VAT) is levy imposed on purchase or sale of goods. It cam into effect from 1st April, 2005 in place of State Sales Tax. As a result, the different states of India will have their own state level structure for VAT. The principle rules and regulations governing VAT in various states will remain same, since, they will be based on the 'White paper on State -Level Value Added Tax' released by the Empowered Committee of State Finance Ministers constituted by the Ministry of Finance, Government of India.

Types of Dealers.
A trader having turnover less than specified limit must not register under VAT Act but if they want to avail the facility of Input Tax Credit, they can register themselves. But traders who have exceeded the limit have to register themselves.

Unregistered Dealer.
Dealers having turnover less than the limit are not registered under the VAT act. They can maintain normal accounts in tally.

Registered Dealer.
Under the VAT Act, registered dealers may have either of the following status:

• Composite Dealer : Dealer having turn over less than the limit determined for composition, and have opte for composition scheme. They need not maintain VAT accounts but are required to maintain proper accounts to get the turnover figure for computation of composite tax.
• Registered Dealer : Dealers exceeding the specified limit must register under VAT Act. They can claim input tax credit and maintain accounts properly as per VAT rules.
  

Budget

We all know, setting up of a budget is an integral part of the job of an accountant, since, it helps in keeping a control over the flow of fund of the organization. Tally allows you to create multiple budgets. There could be a budget for a specific purpose, say for the bank , for the head office, optimistic budget, realistic budget, pessimistic budget,etc. Department-wise budgets can also be created say, marketing budget, finance budget,etc.

Activating Budget.
In order to activate budget Press F11 -> press F1 -> specify 'yes' at the option 'Maintain Budgets and Controls'.

Creating a Budget.
From Gateway of Tally, go to Accounts Info and and select budget. There create a new budget, it will lead you to budget creation screen.

Information to be provided.
Name of the budget can be given as Quarterly budget, Corporate budget,etc.
The top level is primary budget. You can set up more than one primary budget. Under each primary budget, sub-budgets with different names can be created.
Specify the period of budget.
You may want to set/alter the budget for group of ledger accounts or for ledger accounts individually or for cost centres or all of them. We shall take up budget for group first.
Specify 'yes' at group. If you want to set budget for a group, thereby setting budget for all ledgers under the group. Fill in the following fields.