TCS is the short form of ‘Tax collected at source’. This is the tax collected by the seller from buyer on certain goods specified in section 206 C of Income Tax Act. In TCS , the buyer will pay Tax and seller will collect and deposit the tax to the government. In Blog we will configuring TCS in Tally ERP9.
In TCS, a few number of type of transactions comes under the TCS ambit.They are,
- Alcoholic liquor for human consumption including Indian Made Foreign Liquor (IMFL)
- Tendu leaves
- Timber obtained under a forest lease
- Timber obtained by any mode other than under a forest lease
- Any other forest produce not being Timber or Tendu
- Scrap (Scrap means waste and scrap from the manufacture or mechanical working of materials which is usable as such because of breakage, cutting up, wear and tear and other reasons)
- Licensing or leasing of Parking Lot, Toll Plaza
- Mining and quarrying
Enable TCS in Tally ERP9
To activate TCS go to.
Go to Gateway of Tally > F11: Features > Statutory and Taxation.
In the Statutory and taxation screen enable the following options
- Enable Tax collected at source ( TCS) : Yes
- Set/Alter TCS Details :Yes
When setting Set/alter TCS details to Yes you will have a new screen where companies TCS Collectors details will have to be entered.
- Enter TAN registration number :
- Collector Type
- Set/alter details of person responsible: No
- Ignore IT exemption Limit: No
Press Enter and Save
Create TCS Nature of Goods
The next step is to create TCS Nature of Goods.
To do that Go to
Gateway of Tally > Accounts Info. > Statutory Info. > TCS Nature of Goods > Create
Enter the details .
click the Helper and select the Nature of Goods
Enter the details.
Create a party ledger with TCS applicability
You know how to create a party ledger. To do this, go to.
Gateway of Tally>Accountsinfo>Ledgers>Create
In ledger creation screen,under statutory Information activate the follwing option.
Is TCS applicable ? : Yes
Buyer/Lessee Type: Company-Resident
Select exact collected type from the list
Filling ‘Tax registration details’ is a must for E-TCS.
Creating Sales Ledger
Go to Gateway of Tally > Accounts Info. > Ledgers > Create
Enter the following details in sales ledger.
- Name: Enter the name of sales ledger
- Under: Sales Account
- Under statutory information
- Is TCS Applicable: Applicable.
- Nature of goods : Select the TCS nature of goods we have created above. ie, scrap.
The screen will look like this.
Creating stock item for TCS
Checkout this article on creating stock item if you are unaware of it.
Go to Gateway of Tally > Inventory Info. > Stock Item > Create
- Name: Stock item name
- Under: Select the group of stock item if any else select primary.
- Unit: MT – Select the unit for the stock item
- Is TCS Applicable : Applicable
- Nature of goods : Select the TCS nature of goods we have created above. that is, scrap.
TCS Ledger creation
Next step is to create a tax ledger, called tcs ledger.
- Name : Enter the TCS Ledger name.
- Under : duties & taxes
- Type of duty/tax : TCS
- Nature of goods/Contract/License/Lease : Scrap
Below is the screen shot of TCS ledger creation.
Sales transaction in TCS
Lets enter this transaction into Tally
Go to Gateway of Tally > Accounting Vouchers > F8: Sales > Item Invoice
Party’s Account Name : Sandeep Ji.
Sales Ledger : Scrap sale ( here scrap sale).
Name of item : Scrap
Enter quantity ,rate
Press Enter Key twice
Then choose TCS Ledger we have created. The TCS will be calculated automatically.
Below is the sales transaction screenshot.
Payment transaction in tcs
According to section 206C shall be paid to the credit of the Central Government within one week from the last day of the month in which the collection is made.
Read more about TCS Payment here
How to do TCS payment in Tally ERP9?
Go to Gateway of Tally > Accounting Vouchers > F5: Payment
Select bank, then in particulars select TCS Ledger.
Press enter, You will have a screen where TCS Nature of Goods details can be selected.
Printing TCS challan NO/ITNS 281
Press enter and save the screen after giving details in bank allocation details.
You can print TCS Payment challan No /ITNS 281 right away from this payment voucher.
To do this ,Click Print or use Alt + P from this Payment voucher.
You will get a print configuration screen.
Inside the configuration screen there is an option.’Print as TCS challan’.
Type ‘Yes’Here if ‘NO’ is given,a Normal payment voucher will be printed.
Here is the image of TCS Payment Challan.
Form 27 EQ
What is Form 27 EQ?
As per the Income Tax Act, 1961, every corporate and government entity responsible for collection of tax at source should furnish TCS returns containing details of collectee(s) and challan details relating to deposit of tax with the Income Tax Department. Form 27EQ is the quarterly return statement for TCS. The due dates for filing returns are July 15th, October 15th, January 15th, and for the last quarter, April 30th.
To access Form 27 EQ
Go to Gateway of Tally > Display > Statutory Reports > TCS Reports > Form 27EQ
Click on challan reconciliation button on the right or use short cut key F5.
The marked area are the place where data entry is required other details are pulled up from TCS vouchers. Press Enter and save the details.