Activating TDS in Tally

In order to activate TDS in Tally, press F11 from Gateway of Tally. Then press F3 or select Statutory & Taxation option. At the screen two options available - "Enable Tax Deducted at Source(TDS)" and "Set/Alter TDS Details". Set these options as 'yes'.

Tax Deduction at Source(TDS)

TDS is one of the method of collecting Income-Tax under certain circumstances from the assessee. If any specified type of income arises to any person, the Income-Tax Act requires the payer(deductor) of such income to deduct a stipulated percentage of such income at the time of making payment. Only the balance amount is paid to the receiver. The amount deducted as TDS has to be deposited into the Government Treasury, within a specified time.

The TDS is treated as Income Tax payment by the receiver at the time of assessment. A TDS certificate is to be given to the receiver.

Some of the incomes are - salary, interest, dividend, interest on securities, commission and brokerage ,etc

VAT Form and VAT Return

VAT Form
To view the periodical VAT return go to
Gateway of tally -> Display -> Statutory Report -> VAT reports -> VAT Forms. The form for VAT differs according to the state you have selected in the company creation screen.

VAT Return
An assessee falling under the purview of VAT is supposed to file return through Form No. 100. As Tally is VAT complaint it generates the Return based on the transactions entered into. For VAT return form go to
Gateway of tally -> Display -> Statutory Report -> VAT reports -> VAT Forms.

VAT Payable/Carried Forward

The report displays the VAT amount for each type of transactions together with total Output and Input Tax. It shows the VAT payable/Refundable amount, which is the difference between the Total Output Tax and Total Input Tax.

When Output Tax is greater than Input Tax, VAT Payable is Output Tax - Input Tax.
(Output Tax > Input Tax, VAT Payable= Output Tax - Input Tax)

When Output Tax is less than Input Tax, VAT Refundable is Input Tax - Output Tax. Balance Amount is carried forward to next period.
(Output Tax < Input Tax, VAT Refundable= Input Tax - Output Tax)

VAT Report

To see VAT Reports go to Display from Gateway of Tally and then from there go to Statutory Reports, then from there go to VAT Reports.
(Gateway of Tally -> Display -> Statutory Reports -> VAT Reports)

Branch Transfer when VAT is applicable

For goods transfer from the various branches of the company, no VAT is attracted, but for maintaining proper accounts. Tally provides different VAT classes for inter-branch transfer transaction.
For example if goods are to be transfered from Kolkata branch to Mumbai branch. In this case of branch transfer outward for kolkata branch create ledger named Delhi branch under Branch/Division group.
Transfer out a/c under sales group and set 'Yes' at the option 'use in VAT'. Select Consignment/Branch transfer outwards and set 'yes' at Inventory values are effected.
In the sales invoice , select the delhi branch a/c in the Party's A/c Name field and at sales ledger select Transfer Out Ledger.
In case of transfer inward, create the ledger as Transfer in a/c under purchase group and voucher class is Consignment/Branch transfer inward.