DiSHA COMPUTER INSTITUTE

SAMBHAJINAGAR BRANCH

INTRODUCTION OF TALLY.
INTRODUCTION:-

ERP / Tally 9.0 Release 2.0 Unleashes The Full Power Of The New
Engine Built Into It To Give You Sup Native Performance. The Response Time Of
The Application Can Now Be Measured In Second Rather Than Minutes Even For
High Value Data. This Percolates Down Tenfold. Increase in Performance in Several
Operations. It Will Improve the User Experience with the Application and Will
Substantially Increase Productivity.
Tally 9 Release 2.0 Is Incorporate With Server Advanced Feature
Which Bring About On Overall Improved Performance Of The Application. One Of
The Important Advancements Is The Substantial Increase In The Speed Operations
Like Loading Of Company Data. Backup And Restore, Reports, Generation Etc.
Thus Giving an Improved and Thrilling User Experience.
Tally is a financial accounting & inventory management system
developed by peautronic Private limited in Bangalore. It is post transaction system
to tally provides regular cash book, ledger A/C, sales & purchase register etc.
Instead of books it also provides other statement like Trial balance, profit & loss
A/c, balance sheet, fund flow statement, performance analysis statement.

Some Important Terms Used in Tally:-

1).Transaction:-An act of exchange of things between two parties is called as
Transaction.
*Types of Transactions:-
a). Money Transaction:-The Transaction which involves exchange of money
Directly or indirectly is called Money Transaction.
b). Non Money Transaction:-The Transaction which doesn’t involve exchange of
Money directly or indirectly is called Non Money Transaction

1
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
2. Goods:-Any commodity or article which is manufactured or purchased by the
Business main for the purpose of sale is called goods.
3. Debtors: - A person who owns something.
4. Creditors: - A person from whom we own something
5. Assets:-A traders total position such as building cash amount receivable from
Debtor’s goods, goodwill etc.
6. Fixed assets: -fixed assets are those assets which are held in the business for
Long period of time and they are generally used for manufacturing goods
And services.
E.g.: -Plant & machinery, land and building etc.
7. Current assets: -Current assets are those assets which are held in the business
For short period and are generally used for maintaining liquidity of business.
E.g.:- Goods, Cash, Cash in hand etc.
8. Liabilities:-Amount payable by traders for expenses such as creditors loan
Taken from bank, over draft etc.
9. Capital: - What money and money’s worth proprietor invest into his business
From his personal or private estate.
10. Drawing: - Money or goods or things with drawers from his business by the
Proprietors for his personal or private use are called as Drawings.
11. Bad Debts: - The debts which can never be recovering due to bad position of
The debtors are called bad debtors.
12. Account: - It is a summarized and systematic record of transaction is called as
Account.
13. Debit: - It denotes that the accountant has received a benefit from the
Transaction for which it is debited.
14. Credit: -It denotes that the accountant has not received a benefit from the
Transaction for which it is credited.
15. Expenses: - (Expenditure):- An Amount which is paid in return of particular

2
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
Services are called as expenses.
16. Income: - An amount which is received in return of rendering particular
Services are called as income.
17. Appreciation: -Increase in book value of fixed assets.
18. Depreciation: -Decrease in book value of fixed assets.
19. Journal: -A book of original entry is called a journal.
20. Narration: -Explanation or summary of an entry is called narration. It is
Written just below Journal entries. It should begin with the word “being”
or” For”.

RULES OF A/C

Types of Account
1. Personal A/C:-This A/C represents a personal firm’s company society clubs
or any others institution with whom the business deals are called as personal
A/c.
Rule: -“Debit the receiver,
Credit the giver.”
2. Real A/C:-This A/c which represent such as building, furniture, machinery,
Cash A/c are called real A/c.
Rule: - “Debit what comes in,
Credit what goes out.”
3. Nominal A/c:-These A/c are representing all types of expenses and losses and
incomes and such as salaries, wages, rent, discount as called as nominal A/c
Rule: - “Debit all the expenses and losses,
Credit all the incomes and gains.”

3
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH

GROUPS OF A/C:-

S.No Name of A/c Group Balance

1 Opening Stock Stock In Hand Debit
2 Purchase Purchase Debit
3 Purchase Return Purchase Credit
(Return outward)
4 Carriage inward Direct Expenses Debit
5 Custom duty Direct Expenses Debit
6 Octoroi Direct Expenses Debit
7 Wages Direct Expenses Debit
8 Sales Sales Credit
9 Sales return Sales Debit
10 Carriage Outward Indirect Expenses Debit
11 Salaries Indirect Expenses Debit
12 Office expenses Indirect Expenses Debit
13 General expenses Indirect Expenses Debit
14 Administration Indirect Expenses Debit
15 Sundry expenses Indirect Expenses Debit
16 Telephone expenses Indirect Expenses Debit
17 Insurances Indirect Expenses Debit
18 Printing &stationary Indirect Expenses Debit
19 Audit fees Indirect Expenses Debit
20 Post & telegram Indirect Expenses Debit
21 General reserve Indirect Expenses Debit
22 O/S Wages Current Liabilities Debit

4
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
23 Interest paid Indirect Expenses Credit
24 Bank charges Indirect Expenses Debit
25 Commission paid Indirect Expenses Debit
26 Disc. Paid Indirect Expenses Debit
27 Advertisement Indirect Expenses Debit
28 Bad debts Indirect Expenses Debit

29 Depreciation Indirect Expenses Debit

30 Interest received Indirect Income Debit
31 Discount received Indirect Income Credit
32 Bad debts recovered Indirect Income Credit
33 Profit on sales of assets Indirect Income Credit
34 Loss on sales of assets Indirect Expenses Credit
35 Sundry creditors Current Liabilities Credit
36 Bills payable Current Liabilities Credit
37 Bank overdraft Current Liabilities Credit
38 Loan taken Current Liabilities Credit
39 Capital Capital Credit
40 Drawing Capital Credit
41 Cash in hand Cash In Hand Debit
42 Cash in bank Cash In Hand Debit
43 Investment Investment Debit
44 Sundry debtors Current Assets Debit
45 Stock in trade Current Assets Debit
46 O/s expenses Indirect Exp. Debit
47 O/s income Current Assets Credit
48 R.D.D Indirect Income Debit
49 Travel Expenses Indirect Expenses Credit

5
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
50 Party Name Sundry Creditors Credit
(if Purchase/ Paid )
51 Party Name Sundry Debtors Debit
(if Sales/ Received )

COMPANY CREATION.

Create Company:-

Name : Disha Computer Institute Ltd.

Mailing Name : Disha Co. Ltd.
Address : Sambhaji Nagar, Pune-4110 17.
State : Maharastra.
Pin Code : 411017.
E-mail Address : [email protected]

Currency symbol :-Rs

Maintain : A/c’s with Inventory
Financial year :-01.04.2012

Group Creation:-

6
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH

Accounts Info.
Info
Groups

Create

e.g. (Opening Stock)

Under (Stock in Hand)
Accept: - Yes/No

VOUCHER TYPES:-

Voucher Types :-( Accounting Voucher)

1. Contra- (F4)
2. Payment- (F5)
3. Receipt-(F6)
4. Journal-(F7)
5. Sales-(F8)
6. Purchase(F9)
7. Debit note (Ctrl+F9)
8. Credit note (Ctrl+F8)
9. Memorandum Voucher (Ctrl+F10
10. Post dated.

7
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH

1). Contra-related to bank

Eg:A) Deposited cash into bank Rs.7000/-

Dr. Cr.
Bank A/c – Debit 7000 -
To Cash A/c Credit - 7000.
E.g.b) Withdraw cash from bank Rs.3000/-.
Dr. Cr
Cash A/c- Debit. 3000 -
To Bank A/c- Credit. - 3000

2). Payment-related to paid or paying.

Eg: a) Paid rent of Rs 500/-

Dr. Cr.
Rent A/c-Debit 500 -
To cash A/c - 500
B) Paid salary of Rs.7500 to Ramesh.
Dr. Cr.
Salary A/c- Debit 7500 -
To Ramesh A/c- credit - 7500.

8
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
3). Receipt-if we are receiving something.
Eg: a) Received commission of Rs1000
Dr. Cr.
Cash A/c-Debit 1000 -
To commission- Credit - 1000
b) Received interest of Rs.4000.
Dr. Cr.
Cash A/c- Debit 4000 -
To Interest A/c- Credit - 4000.
4. Journal-
1. a) Bills payable of Rs 1000 to sugar
Dr. Cr.
Sugar A/c-Debit 1000 -
To Bills payable A/c - 1000
b) Depreciate Plant& Machinery @10%.
Dr. Cr.
Depreciate A/c- Debit -
To P. & M. A/c- Credit

5. Sales-Something sold

a) Sold goods of Rs 5000/- for cash

Dr. Cr.
Cash A/c-Debit 5000 -
To Sales A/c-Credit - 5000
b) Sold goods of Rs.9000 to Ramesh On credit.
Dr. Cr.
Ramesh A/c-Debit 9000 -
To Sales A/c- Credit - 9000.

9
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH

6. Purchase-
a) Purchase goods of Rs2000/- on credit from Suresh.
Dr. Cr.
Purchase A/c-Debit 2000 -
To Cash A/c-Credit - 2000.
a) Purchase goods of Rs2000/- on cash from Sudhir
Dr. Cr.
Purchase A/c-Debit 2000 -
To Sudhir A/c-Credit - 2000

7. Debit Note:-It means purchase return or return outward.

Return defective goods of Rs2000/- to ganesh.

Dr. Cr.
Ganesh A/c-Debit 2000 -
To purchase return A/c -Credit - 2000.

8. Credit Note: - It means sales return or return outward

Verma returned defective goods of Rs 1000/-to us.
Dr. Cr.
Sales Return A/c-Debit 1000 -
To Verma A/c-credit - 1000.

10
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
Note:-
To start Calculator press (Ctrl+ N).
To come out from Calculator press (Ctrl +M).

11
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH

JOURNAL ENTRIES.
(Problem 1.)
Jan 1. Started business with the cash Rs25, 000/-
Jan 3. Deposited into bank Rs 5000/-
Jan 4. Purchase goods for cash Rs 10,000/-
Jan 5.Sold goods for cash Rs 15,000/-
Jan 6. Purchased goods from Mr. Sharma Rs 5000/-
Jan 7. Sold goods to Verma Rs 5000/-
Jan 8. Return defective goods to Sharma Rs 500/-
Jan 9.Verma returned defective goods Rs 5000/-
Jan 10. Paid cash to Sharma Rs 4000/-
Jan 12. Received cash from Verma Rs 6000/-
Jan 15. Received interest Rs 1000/-
Jan 17. Received commission Rs 1500/-
Jan 18. Paid interest Rs 1000/-

(Problem 2)
Jan 20. Paid commission Rs 1500/-
Jan 22. Purchased goods from Sohan Rs 8000/-
Jan 24. Paid Rs 3000/- to sohan by cheque
Jan 25. Sold goods for cash Rs 10000/-
Jan 28 .Deposited into bank Rs 15000/-
Jan 29. Paid salary Rs 8000/- by cheque
Jan 30 .Withdraw cash from bank Rs 3000/-
Jan 31 .Paid rent to landlord Rs 2000/- Answer 30500.

12
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
Problem 3.
Jan 1. Started business with cash Rs 10,000/-
Jan 2. Purchase goods Rs 2000/- on cash
Jan 5. Sold goods for cash Rs 5000/-
Jan 14. Purchased goods from Mr. Ram Rs 7000/-
Jan 15. Sold goods to Mr. Shyam Rs 12000/-
Jan 18. Paid cash to Mr. Ram Rs 5000/-
Jan 20. Received cash from Mr. Shyam Rs 10,000/-
Jan 25. Deposited Cash into Bank Rs 3000/-
Jan 27. Paid Rent to landlord Rs 15000/-
Jan 31. Paid Salary to staff Rs 3500/
Problem 4.
Jan 1. Started business with cash Rs 25000/-, Furniture Rs 20000, &Building
Rs 1, 55,000/-.
Jan 2. Purchased goods of Rs 11000/- on cash.
Jan 3. Sold goods of Rs 12000/- for cash.
Jan 4. Purchased goods from Mandar Rs 5000 on credit.
Jan 5. Sold goods of Rs 7000 to Sanjay on credit.
Jan 6. Purchase machinery of Rs 10000 on cash.
Jan 7. Deposited cash into cash bank of India Rs 5000
Jan 8. Withdraw cash Rs 25000 from janta bank
Jan 9. Purchased goods of Rs 40,000 from x
Jan 10. Sold goods of Rs 15000 to Y
Jan 11. Bills receivable of Rs 15000 from Y
Jan 12. Bills payable of Rs 10000 to X
Jan 13. Returned defective goods to Mandar Rs 1000
Jan 14. Sanjay returned defective goods of Rs 2000
Jan 15. Withdraw cash Rs 2000 from Bank of India

13
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH

DISCOUNT
Discount: - Discount is a concession given by one trader to another trader for
purchase of large quantity or for consisting repayment.
There are 2 types of Discount:-

1. Trade discount: - It is the discount given by one trader to another trader like
manufacturer to wholesaler to purchase large quantities of goods. It is given
for credit transaction method. It is deducted or calculated from invoice price
of goods and not recorded in the book of accounts.
2. Cash discount:-It is the discount given by seller to purchaser for quick cash
payment. It is given for cash transaction and cash discount. It is calculated
after deducting trade discount. It is calculated on net prices of goods and
recorded in the book of accounts.
Problem 1.
Jan 1. Bought goods from Mr. Date Rs 10000 @ 10%T.D.
Jan 2. Sold goods to Mr. Pawar Rs 20000 @ 10% T.D.
Jan 3. Bought goods on cash Rs 10000 @ 5% C.D
Jan 4. Sold goods on cash Rs 30000 @ 12% C.D
Jan 5. Sold goods to Mr. Santosh Rs 50000 on 10 % T.D
Jan 6. Purchased goods of Rs 5000 @ 5%C.D
Problem 2.
Jan 1. Purchase goods of Rs 15000 on cash @5% C.D.
Jan2. Cash sales of Rs 5000 @5 % C.D
Jan3. Sold goods worth Rs 9800 on cash @ 5% C.D
Jan4. Bought goods of Rs 3300 on cash &received @ 5%T.D
Jan5. Cash sales Rs 3200 @5% T.D & 2% C.D
Jan6. Purchase goods of Rs 10000 @10% T.D &5% C.D

14
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
Jan7. Sold goods of Rs 10000 to Mandar @10% T.D
Jan8. Purchase goods of Rs 15000 @ 10% T.D & 5%C.D
Jan9. Sold goods for Rs 20000 @7% T.D to kulkarni on credit.

BILLS-WISE DETAILS

Bills reference can be of 4 types:-

1) New Reference.
2) Against Reference.
3) Advance.
4) On account.
1) New Reference:-You select this for new transaction If we have a transaction
of sales or purchase with a party on credit and getting goods but paying later
then for this transaction the option new reference should be selected.

2) Against Reference:-If we have paid the money to some party for some bill
then against reference option is selected that the money is paid.

3) On Account :-If we have given some money to some party as a loan then the
option an A/c should be selected that the money given as a loan means, If this
money is not related to the transaction of any other sales or purchase then the
type on account should be selected.

5) Advance:-If we have given advance to party relating to some sales or

purchase or taken some advance from a party then the option advance
should be selected.
Note:-For activation of bills wise detail press F11 and maintain
Bills wise detail “yes” and accept it.

15
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
Problem:-1.
1.2.06. Purchased goods of Rs.5000/- on credit from Ramesh Bill no.150.
10.4.06. Purchased goods of Rs.4000/-on credit from Ramesh Bill no. 175.
27.4.06. Paid Rs.4000/- to Ramesh for bill no.150.
28.4.06. Paid Rs.5000/- to Ramesh for bill no.175.
1.5.06. Sold goods of Rs.12000 on credit to Ashok bill no 201.
5.5.06. Sold goods of Rs.6000/- on credit to Ashok bill no 250.
28.5.06. Received a cash of Rs.8000 from Ashok for bill no 201.
29.5.06. Received a cash of Rs.10000 from Ashok for bill no 250.

Problem:-2
1.8.07. Purchased goods of Rs 20000/-on credit from Dinesh Bill no. 101.
9.8.07. Purchased goods of Rs 9000/- on credit from Dinesh Bill no.205.
15.8.07. Paid Rs 15000/- to Dinesh for bill no 101.
18.8.07. Paid Rs.14000/-to Dinesh for the Bill no.205.

16
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH

MEMORUNDUM
This is a non-accounting voucher and the entries made using memo voucher will
not affect your accounts. In other words, Tally.ERP 9 does not post these entries
to ledgers, but stores them in a separate Memorandum Register. You can alter
and convert a Memo Voucher into a regular voucher when you decide to bring
the entry into your books.
Some of the uses of Memorandum Vouchers are:

*MAKING SUSPENSE PAYMENTS

Consider that a company gives its employees cash to buy office supplies, the
exact nature and cost of which are unknown. For this transaction you can enter a
voucher for the petty cash advance, a voucher to record the actual expenditure
details when they are known, and another voucher to record the return of
surplus cash.
However, a simpler way of doing it is to enter a Memo voucher when the cash is
advanced, and then turn it into a Payment voucher for the actual amount spent,
when the details are known.

*VOUCHERS NOT VERIFIED AT THE TIME OF ENTRY

If there is no clarity with the details of a voucher you are entering, you can enter
it as a Memo voucher and amend it later when the details are available.

*ITEMS GIVEN FOR APPROVAL

Generally completed sales are entered into books. In case items are given on
approval, use a Memo voucher to track and convert it into a proper Sales
voucher. You can cancel/delete the memo voucher if the sale is not made.

17
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
PROBLEM 1.
Mr. John Started Business on 1st July, 2006 with Bank Rs. 2000, Cash Rs. 80000/-
Premises Rs. 5000/-
Cash Purchases Rs.5000/- @ 2% C.D.
Cash Sales Rs.8000/- @ 4% C.D.
Open A Bank Account by Depositing Rs. 1000/-
Purchased Goods Worth Rs. 8000/- From Usha @ 5% T.D.
Sold Goods Worth Rs. 5000/- To Nisha @ 2% T.D.
Paid Insurance Premium Rs. 1000/- On the Life Policy Of Proprietor
Distributed Goods worth Rs. 500/- As Free Samples
Uninsured Goods worth Rs. 1000/- Lost By Fire
Received Rs. 4000/- From Nisha
Sold Goods Of Rs. 2000/- Which Is Not Shown In Balance Sheet

18
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH

INVENTORY
* INVENTORY VOUCHER:-
Inventory Voucher Perform The Same Junction In The Inventory System Just As
Accounting Voucher Do In The Accounting Systems. Inventory Voucher Are
Also Means Of Entering Transaction Inventory. Inventory voucher records the
receipt and the issue of goods, stock & the transfer of stock between locations &
physical stock adjustment
If you have not integrated with inventory, inventory voucher will not
have any impact on balance sheet, stock figure. They will maintain stock balance
separately.

*VOUCHER TYPE:-

Refers the section on voucher types in accounting information because voucher

types available in inventory are similar to ones in accounting you may alter the
existing inventory voucher type or create new ones based on the exisiting ones.

19
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
Problem no: - 1
STOCK QUANTITY RATE (PER UNIT)
ELECTRIC BULBS 2000 NOS RS.8
WALL CLOCKS 100 NOS RS. 250
WIRES 2000 MTS RS. 10
SCREWS 50 DZ RS. 5
MONITERS 15 NOS RS. 900
BOX STRIPS 1000 MTS RS. 20
SWITCHES 500 NOS RS. 10
APPLES 200 KG RS. 60
MANGOES 200 DZ RS. 250
GRAPES 200 KG RS. 40
WATER MELON 50 NOS RS. 25
ORANGES 100 NOS RS. 10
STRAWBERRIES 200 KG RS. 300
POTATOES 200 KG RS. 20
ONIONS 200 KG RS. 18
SWEET POTATOES 200 KG RS. 25
LEADY FIN GARS 200 KG RS. 30
CABBAGES 200 KG RS. 18
BRINGLES 200 KG RS. 22

20
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
MR. KAMAT Started Business With Cash Rs. 50, 000/- Furniture Rs. 25, 000/-
Building Rs. 1,00,000/-
Purchased 20 Dz Screws, 5 Nos Monitors & 10 Nos Wall Clocks
Sold 500 Nos Electric Bulbs, 100 Mts Wires & 200 Mts Box Strips.
Purchased 20 Nos Switches & 10 Nos Electric Bulbs From Mr. Satyam On Credit.
Sold 5 Nos Monitors & 10 Dz Screws To Mr. Bhavan On Credit
Returned To Mr. Satyam 5 Nos Switches & 3 Nos Electric Bulbs.
Purchased 20 Nos Water Melon & 10 Nos Oranges From Mr. Satyam On Credit.
Sold 5 Dz Mangoes From Mr. Bhavan.
Returned To Mr. Satyam 5 Nos Water Melon & 3 Nos Oranges
Purchased 10kg Potatoes, 10 Kg Onions & 5 Kg Sweet Potatoes
Sold 5 Kg Leady Fin Gars, 5 Kg Cabbages & 10kg Bringles.
Purchase 20kg Sweet Potatoes & 5 Kg Cabbages From Mr. Satyam On Credit.
Sold 25kg Cabbages & 25kg Potatoes To Mr. Bhavan On Credit
Returned 5kg Cabbages From Mr. Bhavan
Returned To Mr. Satyam 3 Kg Sweet Potatoes.

21
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH

Problem no: -2

1 Started business with the cash RS 25000 furniture worth Rs 25000 & Building
RS 1, 55,000.
2. Purchased good from “x” for cash (30 shirts @150 each, 20 T-shirts
@100 each &10 jackets @Rs.350 each).
3. Sold goods to Y for cash (20 shirts @Rs.250 each, 15 T-shirt @Rs.200
each, 8 Jacket @ Rs.500 each, and Stock kept @showroom).
4. Purchased goods from Mandar on credit Rs 5000. (10 Trousers @Rs.500 each).
5. Sold goods to Sanjay on credit Rs.7000. (8 shirts @ Rs.250 each, 5 T-shirts @ Rs.
200 each, 1 jacket @ Rs.400, 6 Trouser @ Rs.600 each).
6. Purchased goods from “X” on credit Rs.10000 (20 shirts @ Rs.150 each, 20
T-shirts @ Rs.100 each, 10 Trousers @Rs.500 each).
7. Sold goods to “y” on credit Rs.15000. (22 shirts @Rs.250 each, 15 T-shirts @
Rs. 200 each, 1 jacket @ Rs.500 each, 10 Trouser @Rs.100 each).
8. Returned goods to Mandar @ Rs 1000. (2 Trousers @ Rs.500 each).
9. Received goods returned by sanjay @ RS 2000. (2 T-shirt @ Rs.200 each, 1 jacket
@ Rs. 400 each, 2 Trousers @ Rs.600 each).
Answer 232000.

22
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH

VAT. {Value Added Tax}

The new version of tally 7.2 contains the most important feature of today’s taxation
Feature & that is vat. Vat is the long from of the term value added tax. The Govt. of
Maharastra has also applied vat from April 2005. Vat has been applied because of its
simple structure.

Type of the VAT. :-

There are two types of VAT.
1) Input Vat: - the tax paid on the input goods is called as Input Vat.
2) Output Vat: - The tax collected on the output goods is called on the output
Tax.
If the tax received by vat register business is more than that of input vat it
has two different methods of pay.
a) The difference is carried forward to the next financial period as a input credit &
it is adjusted against the output tax.
b) The input credit is refunded to the business at the end of financial period as
input Credit.
c) Incase of export the input credit is refunded within the three months to vat
register business.

Different Vat Rates:-

1) Vat @4% this amount of vat is charged on same necessary things.
E.g.:- Computer, furniture, Cloths, Stationary.
2) Vat @1% this amount of vat is charged on gold silver and medicines.
E.g.:- Tablets, Capsules, & Other products.
3) Vat @12.5%:-This amount of vat is charged on some injurious and luxuries

23
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
things.
E.g. Tobacco, Wine, Gutakha, Cigarate, Drugs.
4) Vat @20%:- This amount of vat is charged on remaining commodities.

E.g. Diesel, LPG (gas), Petrol, Kerosin.

5) Vat @ exempted:-Things which are naturally and unprocessed.
E.g.:- Agricultural things.

While creating Purchase ledger we have to say-

Name: - Input vat @4%
Under: - Duties and taxes
Type of Duty/Tax:-Vat
Vat/Tax class:-Input vat @4%
Inventory values are affected? Yes
Percentage of calculation? :-4%.

While creating Sales ledger we have to say-

Name: - Output vat @4%
Under: - Duties and taxes
Type of Duty/Tax:-Vat
Vat/Tax class:-Output vat @4%
Inventory values are affected? Yes
Percentage of calculation? :-4%.

24
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
PROBLEM-1:-

MR. CJ Home Appliance Started Business with Cash of Rs. 60000/-, Furniture of Rs.
50000/- , Building Rs. 40000/-.

DEVICES QTY AMT

GODREJ AC 1.5 TON 4 18000
GODREJ WASHING MACHINE 5 15000
GODREJ AIR COOLER 2 7000
21” Color TV. 5 9000
DVD 4 4000
Refrigerator 3 9500

Purchase good from M/S GODREJ.

Godrej AC 1.5 10 nos Rs. 180000/-
Godrej Washing machine 10 nos Rs. 150000/-
Godrej Air Cooler 10 nos Rs. 70000/-
INPUT VAT @ 12.5%

Purchase good from M/S ONIDA.

21” Color TV. 10 nos Rs. 90000/-

DVD 10 nos Rs. 40000/-
Refrigerator 10 nos Rs. 95000/-
INPUT VAT @ 12.5%

Purchase good from M/S SAMSUNG

21” Color TV. 10 nos Rs. 70000/-

DVD 07 nos Rs. 60000/-
Refrigerator 07 nos Rs. 75000/-
INPUT VAT @ 12.5%

Sold good to M/S Aditi Enterprises

21” Color TV. 5 nos Rs. 80000/-

DVD 5 nos Rs. 55000/-
Refrigerator 5 nos Rs. 90000/-
OUTPUT VAT @ 12.5%

25
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH

Sold good to M/S Rakesh

21” Color TV. 1 nos Rs. 10000/-

DVD 1 nos Rs. 7000/-

Sold good to M/S Akash

Godrej AC 1.5 2 nos Rs. 44000/-

Godrej Air Cooler 1 nos Rs. 9000/-
OUTPUT VAT @ 12.5%

PROBLEM 2:-

Purchased Goods from Mr. A for Following Goods

Small Exercise Book 100 pcs Rs. 25/-
Medium Exercise Book 150 pcs Rs. 20/-
Input Vat @ 12.5%

Sold Goods to Mr. B for following goods

Navnit Book 200 pcs Rs. 50/-
Novles 120 pcs Rs. 100/-
Output Vat @ 12.5%

Return goods to Mr. A for following goods

Small Exercise Book 50 pcs Rs. 25/-
Medium Exercise Book 20 pcs Rs. 20/-

Mr. B Return the following goods

Navnit Book 50 pcs Rs. 25/-
Novles 20 pcs Rs. 100/-

Purchase goods from Ganesh General Stores

Sugar 300 bgs Rs. 185/-
Wheat 100 bgs Rs. 50/-
Salt 200 bgs Rs. 75/-
Input Vat @ 4%

26
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
Sold Goods to Tata Tea Company
A Grade Tea 150 bgs Rs. 120/-
Coffee 125 bgs Rs. 75/-
Golden Tea 175 bgs Rs. 150/-
Output Vat @ 4%

27
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH

TDS (Tax Deduction at Sources)

TDS (Tax Deducted at Source) in Tally provides an easy-to-use and flexible
interface. It helps you to handle intricate cases and calculate the tax payable to the
Income Tax Department.
Tally calculates the tax of all parties/ suppliers where TDS deduction is mandatory.
It calculates the TDS automatically and prints Form16A certificates, Forms 26Q, 26,
27 and 27A (Cover Note) for Quarterly/ Annual Returns as per statutory
requirement.
It allows the user to view and print various TDS reports, Challans and TDS
Outstanding statements.

Features of TDS in Tally

The TDS functionality in Tally supports the following features:
Simple and user-friendly
Quick and easy to set up and use
Accounting for tax on partial/full payment of bills
Flexibility for auto and manual calculation of TDS
Complete tracking of each transaction from deduction to payment
Challan management and printing for prompt and accurate filing of tax
The Auto allocation feature prevents error-prone data entry and helps track the
transactions faster.
Form 16A management:
Can be printed for a transaction
Can be printed for a period

28
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
Can be printed yearly
Allows multi-party printing
Exporting of data in NSDL compliant TDS file format.
Electronic format (e-TDS return) with Form 26Q, Form 26 , Form 27 and Form 27A
which will be validated by the utility, provided by the government.
Generates Form 16A, TDS Challan, TDS Computation and TDS Payable reports.

A seller (Deductee) provides services to the buyer (Deductor). The buyer deducts
the amount towards TDS prior to the services or the bills received. The buyer issues
Form No.16A to the Deductee and deposits the deducted amount to the Authorised
Bank (Treasury). The buyer files annual returns electronically to the Income Tax
department.

29
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH

Tax department.

30
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH

Assignment-1

Sundry Creditors Roy Services

Indirect Expenses Technical Services

Duties & Taxes TDS on Technical Services

Total Expenses 30000/- @ 12%

Sundry Creditors Vikash Agarwal

Indirect Expenses Rent

Duties & Taxes TDS on Rent

Total Expenses 20000/- @ 24%

Sundry Creditors Bank Publishing LTD.

Indirect Expenses Advertisement Contracts

Duties & Taxes TDS on Advertisement Contracts

Total Expenses 30000/- @ 12%

Sundry Creditors Sumit Advertising Agency

Indirect Expenses Advertisement Expenses

Duties & Taxes TDS on Advertisement Expenses

Total Expenses 30000/- @ 12%

31
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH

Assignment-2

Sundry Creditors Omkar Enterprises

Indirect Expenses Insurance Commission
Duties & Taxes TDS on Insurance Commission
Total Expenses 33,000/-

Sundry Creditors M/S. Ashok &Son’s

Indirect Expenses Brokerage
Duties & Taxes TDS on Brokerage
Total Expense 34,500/-

Sundry Creditors Mr. Rahul

Indirect Expenses Interest on Securities
Duties & Taxes TDS on Interest on Securities
Total Expense 43,600/-

Sundry Creditors Mr. Deepak Kadam

Indirect Expenses Payment
Duties & Taxes TDS on Sub Contractors Payment
Total Expense 30,000/-

32
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH

SERVICE TAX

Introduction

Service tax is an indirect tax levied on certain category of services provided

by a person, firm, agency, etc. The Government of India has marked a set of services
as taxable under the service tax structure. The seller provides a service and the
responsibility of paying the service tax to the government rests with the seller.

Information on service tax

Currently, the rate of service tax on all the taxable services is 12%. Presently,
service tax is applicable on 97 categories of services. A few of the listed services have
an abatement facility. Service tax returns are to be filed to the Commissionerate of
Service Tax for the fiscal half-year. Information on the registration, rules, list of
services, rate of service tax, forms, etc can be found on the official website for service
tax-http://www.servicetax.gov.in/

When do I pay Service Tax?

When a payment is received from a customer, Service Tax must be paid to the
Customs Department within 28 days of the end of a Taxable Period (a Taxable
Period covers two months). If the licensee does not receive the payment even after
the invoice has been issued, the Service Tax has to be paid within 28 days of the 12
month-period from the date of issuance of the invoice.

Method of Payment

The Service Tax due and payable, in respect of any return required to be filed under
the Act, can be paid by any of the following methods.

1. Cash
2. Postal Order or Money Order
3. Cheque or Bank Draft

33
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
The cheque or bank draft has to be addressed to the ‘State Customs Director’
account where the Tax is paid.

Features of Service Tax in Tally

Service tax integrated in Tally takes care of your service tax transactions. It
eliminates error-prone information, incorrect remittance, penalties, interests,
compliance issues, etc. Service Tax in Tally needs a one-time configuration for
service tax features to be activated.

Tally tracks bill-wise (bill-by-bill) detail and automatically calculates service tax
payable and input credit with the flexibility to make adjustments later.

Service tax is part of a regular transaction. Information on service tax is maintained

and produced category-wise, which is mandatory in service tax returns.

Adjusts input credit towards service tax payable.

Accounts for abatement and expenses.

Provision for exemption notification details.

Built-in assessable value feature on which service tax is calculated.

Transfer earlier pending service tax payable and available service tax input credit in
to Tally

Reports are generated as per government suggested format. Print and file reports:
G.A.R.-7 Challans, Input Credit Form, ST3 Report and ST3-A Report.

Management Information Services (MIS) reports: Service Tax Payable Report and
Input Credit Form

When you buy and sell services?

A person/firm providing a service that comes under the service tax category has to
pay service tax. Service tax is to be shown separately in the invoice and is payable
based on the payment realized and not on the total amount shown in the invoice.
Similarly, when you buy a service that falls under service tax category, you avail
service tax credit based on the payment made. So, you pay service tax on the
services that you sell and get credit on the service tax payable when you buy a
service.

34
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
Adjusting credit?

While you pay service tax on sale of services that come under the service tax
category, you can adjust service tax credit availed on purchase of services (Buyer).
This deduction is called adjusting credit against service tax. The difference between
the service tax that you have to pay for selling services and the service tax credit on
purchases that can be adjusted is the payable service tax.

Service tax (sales) that is adjustable against service tax credit (purchases) is also
called availing input credit. Let us look at an example.

35
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH

Assignment -1

1) Purchase Telephone Service From Bsnl Co .Ltd @23000/- With

Including Service Tax.

2) Sale of Computer Course for Rs. 35000/- To Mr. Amit Patil with
Including Service Tax.

Assignment -2

1) Purchase Airport Service From Kingfisher Airline @ 15000- with

Service Tax.

2) Sale of Banking for Rs. 30000- To Mr. Vishwas Kadam with Service
Tax.

36
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH

IMPORT & EXPORT

Export of Data: - Use Export option to export report and statements from tally.
The exported report can be viewed in a spreadsheet, published on the web or
exported to another company using tally.
By default, the exported file will be saved in the tally folder on your
computer. To export to a different folder enter the path of the drive and folder in
output file name. Another program can be used to import the content from the
exported file or it can use as is.
Export Master Data: - Master data from tally can be exported to standard
formats like ASCII, Excel, HTML and XML using the export features. The
exported data can be used by other programs.
To export master from tally, Go to Gateway of Tally – Display – List of Accounts.
Use Alt + E or click Export on the button bar. This display the Report Generation
Screen. Press Backspace or Esc or No to change the default values.
Language: - Select the language in which you would like the data to be exported.
Format: - Select from the four formats available
ASCII (Comma Delimited)
EXCEL (Spreadsheet)
HTML (Web – Publishing)
Xml (Data Interchange)
ASCII (Comma Delimited): - In Tally all reports can be exported to ASCII by
selecting ASCII (Comma Delimited) format from the export format screen. This
feature enables the user to export any report generated by tally into plain text
format with values separated by commas. This format is commonly used for
email and several other programs.

37
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
EXCEL (Spread Sheet): - In Tally all reports can be exported to Microsoft Excel
Spreadsheet by selecting Excel (Spreadsheet) option from the export format
screen. This features enables the user to export any report generated by tally into
excel. Consequently, the user can generate graphical representations of the data
for better visual presentation.
HTML (Web-Publishing): - In Tally all report can be exported to HTML format
by selecting HTML (Web-Publishing) from the export screen. Report in Hyper
Text Markup Language (HTML) format retains their formatting and fonts. They
can be read using an HTML enabled mail program, or using browsers such as
Microsoft Internet Explorer.
XML (Data Interchange): - In Tally all report can be exported to XML format by
selecting XML (Data Interchange) from the export format screen. Extensible
Markup Language (XML) is an extension of HTML, but the data can be imported
by other XML-Aware systems.
Import of Masters: - Master from another company can be imported to tally and
merged with the data of the current company.
Go to Gateway of Tally > Import Masters.
The Import of Data screen is displayed.
Enter the Full Path of the file in the import file
Name Field Exp: c:\ tally rc/1.11\day book.xml.
Select the appropriate option in the treatment of entries already existing field
from the behavior menu.
Combine opening Balance: - Select this to combine the opening balance of the
imported master with the opening balance of the current company.
Ignore Duplicates: - Select this to ignore duplicate entries from the imported
entries are the exact replicas of entries in the current company, they are called
duplicate entries.

38
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
Modify with New Data: - Select this to add new data from the imported master
to the current company data.
Enter to Accept.

39
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH

BRS (Bank Reconciliation Statements)

Reconciling the Company bank account with the banker statement is a

regular task of accounting. In Tally Reconciliation of Bank Accounts facilitates
the following.
Tally use Bank Data to mark against the voucher
For instance if you issue a cheque on 8th April and your bank clears it on 19th
April, you would set the bank data for the voucher as 19th April. This means that
means that when you need to check back later whether the entry made by you is
correct, you will only need to verify the bank statement of the 19th April. A quick
experiment with reconciliation will show you what it all means. Here is how you
go about it.
Bring up the monthly summary of any bankbook (you can choose a bank book
from any of the following Balance sheet, Trial Balance, Display > Account Book >
Cash/ Bank Books).
Bring the cursor to the first month (typically April), and press enter. This brings
up the voucher for the month of April. Since this is a bank account, you can see
an additional button. F5 Reconcile on the button bar to the right Press F5.
The display goes to the Reconciliation mode, which can be edited. The primary
component of the current screen is the column for Bankers Data.
The Reconciliation found at the bottom of the screen shows:-
Balance as per company Books.
Amounts not reflected in Bank.
Balance as per Bank.

40
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH

Payroll System
The Tally payroll is integrated with accounting to give the user the benefits of
simplified payroll processing and accounting.
Tally payroll enables user to set up and implement salary structures,
ranging from simple to complex, as per the organization’s requirements. You can
also align and automate payroll processes and directly integrate them with main
stream accounting application. Payroll data can be viewed as part of the existing
and configurable cost center report for business analysis.
Tally payroll also support configurable formats for pay slip printing,
flexible salary / wage, attendance, leave and overtime registers, gravity and
export reports.

Features of Tally Payroll: -

In keeping with Tally tradition of simplicity strength and
flexibility, Tally payroll offers the following features to meet the diversified
requirement of small to large business enterprises.
It allows seamless integration with Tally accounts. There are no disconnects
between payroll and accounts.
It offers employee Group – Ultimate classification and sub- classification of
employees.
It offers pay structure ease of conformity, faster entry and flexibility of non-
dependence.
It offers pay components user definable earnings deduction and other.
It offers a unique auto manual payroll processing facility.
It is independent of processing period restriction.
It offers employee group, pay structure and pay components.
It offers a unique auto manual payroll processing facility.

41
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
It allows areas calculation.
It computer salary based on attendance time units of production or any other
criteria.
Tally payroll help in tracking of loans and advance.
It provides calculation of gratuity.
It allows drilling down from any summary report to detailed levels and till the
originating transaction for a particular component value.
It provides configurable report format.
You can also process payroll using the multilingual features in tally.
Payroll in Tally: -
Gateway of tally – F11 Features – Accounting Features – Maintain
Payroll – Accept – Yes.
Payroll Info: -
The payroll into allows you to set up the employee defaults and
standards. Payroll information with common payroll fields used for calculating
earning and deduction.
Go to Gateway of Tally – Payroll Info.
Pay Head
Employee Group
Employee
Salary Details
Units (Work)
Attendance / Production Types
Voucher Types.
Pay Head: -
The salary components constituting pay structures are called Pay
Head. A pay head may be an earning, which is paid to an employee, or a

42
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
deduction, which is recovered from his/her salary. The value of these pay head
could be either fixed or variable, for each payroll period.
A Pay head is categorized as Allowances, Deductions or
Reimbursements.
In Tally Payroll, Pay Head types are provided in a natural language
for ease of use, as follows:
Earning for Employees
Deduction from Employees
Employee’s statutory deductions
Employer’s statutory contribution
Gratuity
Loans and Advances
Reimbursement to Employees
While creating the salary payable ledger you can use Not
Applicable type which will be used to post appropriate accounting entries.
Calculation Types: -
The Calculation of the pay head is based on its Calculation
Type. Tally payroll allows following calculation methods.
As Flat Rate: -
A Flat Rate is a Calculation where the value of the pay head is a
fixed amount for a period. Pro-rate will not happen in this type of the
component.(Pay Head) Examples of Flat Rate Calculation type:
Conveyance Allowance of Rs . 800.00 per month is exempt from tax and followed
by many organization.
Fixed Loan Installment deduction amount.
Payroll Process: -
Alt + F3 – Create Company – Name – Payroll –Yes
Press F11 – Company Features – Accounting Features

43
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
Accounting Features
Cost/Profit Centers Management: -
Maintain Payroll ? Yes
Maintain Cost Centers ? Yes
Use Cost Centre for Job Costing ? Yes
More than ONE Payroll / Cost Category ? Yes
Use Pre-defined Cost Centre Allocation During Entry? Yes

Accept?
Yes

Payroll Info – Unit (Work) Create: -

Type – Simple
Symbol – Month
Formal Name – Month
Type – Simple
Symbol – Day
Formal Name – Hours Yes

Type - Simple
Symbol – hrs
Formal Name – Hours
Type – Simple
Symbol – Min
Formal Name – Minutes
Back Space – Compound
Symbol – (i) Month of 26 Days
(ii) Days of 24 Hrs
(iii) Hrs of 60 Min
Attendances Production Types – Create: -
Name – Present

44
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
Under – Primary
Attendances Type – Attendance / Live with Pay
Name – Absent
Under – Primary
Attendances Type – Leave without pay
Name – Overtime
Under – Primary
Attendances Type – Production: -
Period Days – Hours
Employee Group – Create
Category – Primary Cost Category
Name – Purchase Department – Accept
Name – Sales Department – Accept
Name – Management Department – Accept
Name – Account Department – Accept
Employee – Create: -
Name – Mr. Ram
Under - Purchase Department
Name – Mr. Mahesh
Under - Sales Department
Name – Mr. Akash
Under - Management Department
Name – Deepak
Under - Account Department

Pay Head – Create: -

Name – Basic Salary
Pay Head Type – Earning of Employees

45
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
Under – Indirect Expense
Net Salary – Yes
Pay Slip – Basic Salary
Use – No
Calculation – On Attendance
Attendance Pay – Present
Calculation Period – Month
Basic – As per Calendar Period

Name – DA
Pay Head Type – Earning of Employee
Under – Indirect Expense
Net Salary – Yes
Pay Slip – DA
Use – No
Calculation Period – As Computed

Name – HRA
Pay Head Type – Earning of Employee
Under – Indirect Expense
Net Salary – Yes
Pay Slip – HRA
Use – No
Calculation – As Computed Value

Name – PF
Pay Head Type – Deduction from employee
Under – Indirect Expense

46
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
Net Salary – Yes
Pay Slip – PF
Use – No
Calculation – As Computed Value

Salary Details:-
Ram – Basic Salary – 10,000/-
DA
HRA
PF
Mahesh – Basic Salary – 17,000/-
DA
HRA
PF
Akash – Basic Salary – 25,000/-
DA
HRA
PF
Deepak – Basic Salary – 30,000/-
DA
HRA
PF

Payroll Voucher
Ctrl + F 5 – Create Attendance – one – accept
Exam – Present 28days
Absent 2days
Overtime 10hrs

47
 DiSHA COMPUTER INSTITUTE
SAMBHAJINAGAR BRANCH
Ctrl + F4
Account – Cash – Alt + A
Process for – Salary
From – 1/4/2011
To - 1/4/2011
Employee Category - Primary Cost Category
Employee /Group - All Items
Payroll Ledgers - Cash

(Gateway of Tally – Display – Payroll Report – Statement of Pay Slip-

Pay Slip - Single Pay Slip – Name – Enter – Alt + P – Enter – Alt + Z.)

48