TCS Tax collected at source in Tally

Dear Friends, Today, we talk about the TCS in this article and how to use TCS Tax in Tally software. The tax collected to be paid to the central government within one week of the last days of the month the tax was collected.

Must Read: How to use Branch Transfer Outward and Inward in Tally

You know very well about the Tally software. At present time Tally is one only most popular accounting cum inventory software that handles the day to day all routine operations of any business unit very effectively. It is widely accepted by the different accounts for its user friendly nature. Tally provides different accounting and inventory features that allow any user to maintain his company accounts effectively.

What is the TCS Tax (Tax Collected At Source) in Tally:

TCS Stands for “Tax Collected At Source”. TCS is an indirect tax collected at source by the seller while debiting the amount payable by the buyer. If you collect TCS from any party then it will necessary to issue tax collected certificate within 10 days. The certificate shall be in form number 27D. The payment of TCS to the government by the Income tax Challan 281.

The tax collected to be paid to the central government within one week of the last days of the month the tax was collected. This payment is made in any branch of Reverse bank of India, State bank of India or any other authorized bank.

1.    The Quarterly returns are to be filled in Form Number 27EQ.
2.    The Annual returns are to be filled in Form number 27E.
3.    The electronic returns are to be filled in Form Number 27B.

Note – TCS is applicable only on sales entry.

How to use TCS Tax in Tally

You have to follow given steps to use TCS in Tally software: Have a look:

Step 1: Press F11 > Statutory & Taxation (F3) >
Enable TCS (Tax Collected at Source) – Yes
Set / Alter TCS Detail – Yes
Fill the required detail and save the information.

Step 2: Create following ledger accounts from GOT > Accounts Info > Create option

1.    Party
Under – Sundry Debtor
Is TCS applicable – Yes.

2.    Sales a/c
Under – Sales

3.    TCS on ITEMS
Under – Duties & taxes.
Select TCS with TCS category.
Note – Creation of product which has you collected TCS.

Step 3: Make entry in Sales voucher (F8) with TCS.

How to view/ print report of TCS Tax:

GOT > Display > Statement of Accounts > TCS outstanding.

Step 4: Make entry in Receipt Voucher to Received amount of sales & TCS from the debtor.

Step 5: Make entry in Payment Voucher for Payment of Outstanding TCS.

How to Reconciliation of TCS amount:

If you want to reconciliation of TCS amount then click on the GOT > Display > Ledger > Select TCS ledger and press > Alt + F5 for TCS reconciliation.

Must Read: How to make entries of Service Tax in Tally

I hope you like this post. Give your important suggestions in comment box regarding this post. Thanks.


    1. Dear Arundhuti,

      In our upcoming articles you will get assignment of TCS. Please keep in touch.

  1. U told only about sales n dr..
    But what about purchase n cr..
    Without purchasing an item we cant sale..
    What we have to do..
    Plz tell me

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