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Tally.ERP 9 Series A Release 3.0
Income Tax

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Agenda
• Enabling Income Tax
• Configuring Employee Masters
• Creating/Altering IT Pay Head
• Income Tax Master Configuration
• Income Tax Reports

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Enabling Income Tax
• Gateway of Tally > F11: Features > Statutory &
Taxation
Enable Payroll
Statutory &
Specify Details
Provide
Income Tax
Details

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Income Tax Computation
The approximate Income Tax Computation can be
viewed immediately after enabling the Payroll
Statutory Feature, without any further configurations.
Gateway of Tally > Display > Payroll Reports > Statutory Reports
> Income Tax > Computation
Tally.ERP 9 Identifies,
•All earning components are considered as fully taxable
•PF and PT are considered for Deduction

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Configuring Employee Masters
• Gateway of Tally > Payroll Info. > Employees >
Alter
Income Tax slab will be
applied based on Gender &
Date of Birth (Senior
Citizen)
Income Tax rate gets
selected based on PAN
availability & non
availability

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Create TDS Pay Heads
• Gateway of Tally > Payroll Info. > Pay Heads >
Create/Alter
Create/Alter Salary Details for all Employees for effect TDS Deduction.
Note: If TDS Pay Head already exists, you have to alter the same as shown.

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Income Tax Master Configuration
• Pay Head Configuration
• Declarations
• Override Exemption Value
• Override Tax Value
• Tax Configuration
• Previous Employer Details

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Pay Head Configuration
• Gateway of Tally > Payroll Info > Income Tax Details
> Pay Head Configuration
By default all pay heads are
grouped under Other
Earnings/ Allowances(Fully
Taxable)
Select the Pay head and
press enter to group the
Income Tax Components
respectively
TDS gets computed
based on Projected or On
Actuals whichever is
selected
When method of calculation is
On Projection then Deduct
TDS by default will be set Yes
When method of calculation is
selected as On Actuals then
Deduct TDS across period can
be manually set to Yes or No
Pay Head Configuration
is Completed

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Declarations
• Exemptions U/s 10
o Rent and Place of Accommodation
o Children Education Allowance
o Children Hostel Expenditure Allowance
o Conveyance Allowance
o Leave Travel Allowance
• Deductions Under Chapter VIA
o Investments (U/s 80C and 80CCF)
o Others (U/s 80D, 80DD, 80E etc.)

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Declaration of Exemptions U/s 10
• Gateway of Tally > Payroll Info. > Income Tax
Details > Declarations
Press Enter here, to
declare Rent details
and Place of
Accommodation re
Specify the Rent details, details of Actual rent
Paid and Accommodation
Note: Actual rent Paid can be entered later also

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Deductions under Chapter VI-A
• Gateway of Tally > Payroll Info. > Income Tax
Details > Declarations
• Press Alt+I for Multi Employee Single Component
declaration
• Press Alt+N for Single Employee Multi Component
declaration
Similarly, specify details for Other deductions

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Override Income Tax
• Go to Gateway of Tally > Payroll Info. > Income Tax
Details
If the employer wants to
override the earnings
(Income) or Exemption value
or even Tax value of the
employee it can be done from
the Override options

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Tax Configuration
• Gross Salary
• Allowance to the extent exempt U/s 10
• Deduction U/s 16
• Other Income reported by Employee
• Deductions under Chapter VI-A
• Relief
• Tax Deduction Details

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Allowance to the extent exempted U/s 10
• Gateway of Tally > Payroll Info. > Income Tax
Details > Tax Configuration
Press Enter on the
required Component
Press Enter to specify
the Declaration
Press Enter here to
Configure the Pay
Heads
Specify the required details and save

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Previous Employer Details
• Gateway of Tally > Payroll Info. > Income Tax
Details
Previous Employer
Income/Exemption and Tax
Deduction Details can be provided
from the above masters

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Processing Payroll
• Gateway of Tally > Payroll Vouchers
Press Alt+A for
Payroll Auto Fill
Income Tax
amount Deducted

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Income Tax Payment
• Gateway of Tally > Accounting Vouchers > F5
Press Alt+A for
Payroll Auto Fill
Specify the details for
Challan printing
Press Enter to accept. Press Page
Up and followed by Alt+P

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Payroll Income Tax Reports
• Computation
• Salary Projection
• Returns
o Form 16
o Form 12BA
o ITR 1
• Challan Reconciliation
• Exception Reports
o PAN Not Available
o Other Records
o TDS Variance

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Payroll Reports
• Gateway of Tally > Display > Payroll Reports >
Statutory Reports > Income Tax

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Income Tax
Thank You
For more information visit
www.tallysolutions.com