PROJECT FILE ON COMPUTERISED

ACCOUNTING
SUBMITTED TO:-
Dr. Navjeet kaur
(P.G.Deptt. of Commerce)
SUBMITTED BY:-
Varandeep Kaur
Roll No:- 172716
Class:- B.Com (H) sem 2nd

S.G.T.B khalsa college , Shri Anandpur sahib

 AKNOWLEDGEMENT
The success and final outcome of this project required a lot of guidance and
assistance from many people and I am extremely privileged to have got this all along the
completion of my project. All that I have done is only due to such supervision and assistance
and I would not forget to thank them.
 
I respect and thank Dr. Manjit Singh, for providing me an opportunity to do the
project work in and giving us all support and guidance which made me complete the project
duly. I am extremely thankful to him for providing such a nice support and guidance, although
he had busy schedule managing the corporate affairs.
 
I owe my deep gratitude to our project guide , who took keen interest on our
project work and guided us all along, till the completion of our project work by providing all the
necessary information for developing a good system.
 
I would not forget to remember Mr Mhesh Kumar, (CA)for their encouragement
and more over for their timely support and guidance till the completion of our project work.
 
I heartily thank our internal project guide Prof .Mnpreet Kaur for her,guidance and
suggestions during this project work.
 
I am thankful to and fortunate enough to get constant encouragement, support
and guidance from all Teaching staffs of Department of Commerce which helped us in
successfully completing our project work. Also, I would like to extend our sincere esteems to all
staff in laboratory for their timely support.
 

TEACHER SIGNATURE
 CONTENTS

 Introduction to GST
 Introduction to income tax
 Tally ERP 9
 Feature of Tally ERP 9
 Installation of Tally ERP 9
 Company creation
 Features of Tally ERP 9
 Accounts information
 Inventory information
 Voucher creation
 Benefits of tally ERP 9.
 Limitation of Tally ERP 9
 INTRODUCTION TO INCOME TAX
An income tax is a tax imposed on individuals or entities (taxpayers) that varies with
respective income or profits (taxable income). Income tax generally is computed as the product
of a tax rate times taxable income. Taxation rates may vary by type or characteristics of the
taxpayer.

The tax rate may increase as taxable income increases (referred to as graduated or
progressive rates). The tax imposed on companies is usually known as Corporate Tax which is
levied at a flat rate. However, individuals are taxed at various rates according to the slab in
which they fall. Further, the partnership firms are also taxed at flat rate. Most jurisdictions
exempt locally organized charitable organizations from tax. Capital gains may be taxed at
different rates than other income. Credits of various sorts may be allowed that reduce tax.
Some jurisdictions impose the higher of an income tax or a tax on an alternative base or
measure of income.

Taxable income of taxpayers resident in the jurisdiction is generally total income

less income producing expenses and other deductions. Generally, only net gain from sale of
property, including goods held for sale, is included in income. Income of a corporation's
shareholders usually includes distributions of profits from the corporation. Deductions typically
include all income producing or business expenses including an allowance for recovery of costs
of business assets. Many jurisdictions allow notional deductions for individuals, and may allow
deduction of some personal expenses. Most jurisdictions either do not tax income earned
outside the jurisdiction or allow a credit for taxes paid to other jurisdictions on such income.
Nonresidents are taxed only on certain types of income from sources within the jurisdictions,
with few exceptions.

Most jurisdictions require self-assessment of the tax and require payers of some
types of income to withhold tax from those payments. Advance payments of tax by taxpayers
may be required. Taxpayers not timely paying tax owed are generally subject to significant
penalties, which may include jail for individuals or revocation of an entity's legal existence .

Assessment Year [Section 2(9)]

“Assessment year” means the period of 12 months commencing on the 1 St. day of April every
year.

In India, the Govt. maintains its accounts for a period of 12 months i.e. from 1st April to 31st
March every year. As such it is known as financial year. The income tax department has also
selected same year for its assessment procedure.
The Assessment year is the financial year of the Govt. of India during which income of a person
relating to the relevant previous year is assessed to tax. Every person who is liable to pay tax
under this Act. files return of income by prescribed dates. These returns are processed by the
income tax department officials and officers. This processing is called assessment. Under this
income returned by the assessee is checked and verified.

Tax is calculated and compared with the amount paid and assessment order is issued. The year
in which whole of this process is undertaken is called assessment year.

Previous Year {Section 2(34)}:-The term perivious year is very important because it is the
income earned during previous year which is to be assessed to tax in the assessment year. As
the word previous year means ‘coming before’, Hence it can be simply said that the previous
year is the financial year preceding the assessment year

Assessee {section 2(7)};-‘Assessee’ means person by whom any tax or any other sum of
money is payable under this act and includes :

 Every person in respect of whom any proceeding under this act have been taken for the
assessment of his income or of the income of any other person in respect of which he is
assessable or loss sustained by him or by such other person or of the amount of refund
due to him;
 Every person who is deemed to be an assessee under any provision of this act;
 Every person who is deemed to be assessee-in-default under any provision of this act.

TYPES OF ASSESSEE :-

1) Ordinary assessee :- The person who is liable to pay tax or refund or against
proceedings starts under income tax act,1961.
2) Repesentative assessee :- The person who is liable to pay tax on the income of another
persons.
3) Assessee in default :- The person who is not fulfill the provisions of income tax act,1961
is called Assessee in default.

Person {section 2 (31)}Persons Includes :-

 An Individual;
 A Hindu Undivided Family;
 Company;
 The income
 An Association of persons or a body of individuals whether incorporated or not;
 Income:- Income include salary profit and gain dividend other source of income house
property income capital gain . The term income simple means something which comes
in .It is a periodical return with regularity or expected regularity. It nowhere mentioned
that income refers to only monetary return. It include value of benefit and perquisites.

Block of assets;- It means a group of assets falling with in class of assets. For example
tangible assets being building machinery plants and furniture. Intangible assets patents
copy right trade marks licenses or any other business or commercial rights of similar
nature.

RESIDENTIAL STATUS
An Indian who is a citizen of India can be non resident for income purpose where as
American who is a citizen of America can be resident of India. For income tax purpose .
Residential status of connection of the person depend on the territorial connection of the
person with this country that is for how many days he has physically stayed in India

Type of resident status

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Residential status of an individual

 Resident(Ordinary resident):- An individual who fulfill any one of following two testing is
called resident under the provision of this act.
1) If he stay in India during the relevant previous year for 182 days or more [under
section 6(1)a]
OR
 2) He was in India for 60 days or more during relevant pervious year and 365 days or
more during four pervious year presiding the relevant pervious year{under section
6(1)b]
AND
3) He must be resident for 2/10 previous year preceding the relevant previous year
[ under section 6(6)a]
AND
4) He must stay in India for 730 day or more during seven previous year preceding the
relevant previous year [under section(6)b]
Ordinary resident= Satisfying any of the condition given under section 6(1)a and b
+
Satisfying both the additional condition of under section 6(6) a and b

 Resident but non ordinary resident under section 6(6):- An individual who is resident
under section 6(1) can claim the beneficial status of non ordinary resident if he can
prove that following two conditions
 He was non resident in India for a previous year out of 10 previous year
preceding the relevant previous year
 He was India for a period of 729 days or less during the seven previous year
preceding the relevant previous year

 Non resident under section 2(30);- An assessee who does not fulfill any two conditions
given in section 6(1) a or b would be regarded as non resident assessee during the
relevant previous year for all pupose of this act

Residential status of hindu undivided family

 Ordinary resident:-HUF is trend to be resident in every case if controlled or management

of such HUF was wholly or partially in India during relevant previous year.
 Non ordinary resident:- This condition is only fulfilled by Karta because Karta is treated as
an individual if Karta fulfilled following one condition out of two;-
 He was non resident in India for a previous year out of 10 previous year
preceding the relevant previous year.
 He was in India for a previous of 729 days or less during the 7 previous year
preceding the relevant previous year .
 Non resident:- If control or management of such HUF was wholly outside India during
relevant previous year.
 Residential status of firm AOP/BOI

 Resident:- If control or management of such a firm AOP/BOI was wholly practically in

India during relevant previous year.
 Non resident:- A company which is incorporated outside India and has it is controlled or
management outside India during relevant previous year is non resident company.

PROVIDENT FUND
To encourage saving of the social security of the employees the government has setup various
kind of provident fund. The employees contributes fix percentage of his salary towards this
funds in many cases employer also contributes.

Types of provident fund

1) Statutory provident fund:- It is the oldest type of provident fund. It was started in 1925
through a provident fun out of 1925 this fund was started with a view of promoting
saving among government employees. Generally this fund is maintained by government
or semi government department like railways, RBI, colleges , universities , local bodies
etc
Treatment .
a) The employees on contribution will qualify for deduction under section 80C
b) The employees on contribution will be fully exempted.
2) Recognized provident fund:-It is a fund to which the commissioner of income tax have
give the recognisation as required under income tax act generally this fund is
maintained by industrial undertaking business houses banks etc.
Treatment
a) The employee on contribution toward his fund will fully qualify for deduction
under section 80C
b) Interest on provident fund credit balance up to prescribed rate 9.5% is
exempted
c) If employee is government or semi government the their contribution towards
recognized provident fund and interest credit to RPF are fully exempted.
3) Unrecognized provident fund:- It is the provident which is not recognized by
commissioner of income tax. The employee and employer both contribute in this fund.
 Treatment
a) The employee contribution is added into the salary. There is no deduction under
section 80 C
b) The employer contribution is not included in employee salary
4) Public provident fund:- All above funds are for the salary person on 1 st july 1968 a new
fund known as public provident fund was started so that self employed people may also
enjoy the benefit of deduction of under section 80 C self employed people are tradrs
accouters etc.

ALLOWANCES
It mean any amount or small allowed regularly as such allowances are given in cas along with
salary by the employer.There allowances are given to an employee to mmet some specific types
of loss or expenditure of the employee. There are three kinds of allowances which are
explained as under:-

 Fully exempted:-
a) House rent allowances given to judge of high court and supreme court
b) Allowances of united national organization
c) Foreign allowances only in case of government employer.
 Fully taxable
a) Dearness allowance:-It is fully taxable and added into the calculation of gross
salary. Dearness allowances have some different name which are- dearness
allowance enter, dearness allowance service benefit etc
b) Entertainment allowance:- for non government employers are fully taxable
c) City/capital/lunch/marriage/family/overtime:- are fully taxable
 Partially taxable allowance:-
a) Eduction allowance:- under education allowance is to be exmepted up to
rs1000p.m for per child and maximum exemption is upto 2 childerns.
b) Hotel expenditure allowance:- this is exempted up to rs300p.m for per child and
maximum exemption is upto 2 childern.
c) House rent allowance:-
i. Employees living in own house- Under this case house rent allowance is fully
taxable
ii. Employees living in rent house in metro city – Under this case house rent
allowance is calculated as under
· 50% of salary
· Rent paid – 10% of salary
· Actual house rent allowance received
 Which ever is less is to be exempted
Taxable house rent= actual received – exempted amount
iii. Employees living in rented house in other city –Under this case house rent
allowance is calculated as under
· 40% of salary
· Rent paid- 10% of salary
· Actual amount received
Which ever is less is to be exempted
d) Transport allowance:- Transport allowance is to be exempted up to rs1600p.m
and for handicapped person up to rs3200p.m is to be exempted.

PERQUISITES/GRATUITY/PENSION
PREQUISITIES
Any extra benefit provided by the employer to employee a perk from salary for performing job
effectively in kind or cash termed as perquisites.

Treatment of Perks

 Perks exempted of all employees:- these include the following

I. Free refreshment during working hours.
II. Free ration received by members of armed forces.
III. Rent free accommodation given in remote or off shore areas
IV. Telephone bills fully exempted
V. Free medical facilities as given under section 17(2)
VI. Free education training courses for employees
 Perks taxable for employees:- These include the following
I. Use of moveable assets:- In case employee or any other member of his
household is using any moveable assets owned by the employer except
computer and laptop then value of benefit is 10% of the cost of that assets is
taxable. In case the period for which asset is given for used to employee is less
then full year the value of benefit=
10% of cost of assets X no.of assets is used
No. of days of financial year
II. Rent free house:- In case of government employee the value of house rent is
fixed by the government for such house. It can be rent charged by government
from another employee of same status for similar type of house. Market rent
 value of this type of accommodation is not taken into account and hence
ignored.
In case of other employees is calculated in following manner
· If population is more than 10 lakh the rule is 10% of salary is taxable in
case house owned by company
· If population is more than 25 lakh the rule is 15% of salary is taxable in
case house owned by company
· If population is below 10 lakh the rule is 7.5% of salary is taxable in case
house owned by company
· If house is hired by company the rule is 15% of salary or rent paid which
ever is less is taxable
· In case of hotel accommodation if he stay more than 15days than the rule
is 24% of salary or actual bill paid by employee which ever is less is
taxable
 Perk taxable for specified case/ employees only:- An employee is set to be specified
employee is any of the following case
a. If he is director of company
b. He has substantial interest in the affair of the company that is he holds at
least 20% of the voting power in the company
c. His monetary salary is more the rs50000 p.m

GRATUITY
It refers to a lump sum payment by an employer to his employee at the time of leaving jon in
appreciation of his long and loyal services.

Treatment

 For the government and semi government employees;- the rule in this case it is
fully exempted
 For employee covered under payment of gratuity act:-
o Notify limit Rs10 lakh
o Actual gratuity received
o 15 days average salary for each year of completed that is
 Average monthly salary X 15 x number of year
26
 Taxable gratuity = actual gratuity – exempted amount
 For employees not covered under gratuity act
o Notified limit 10 lakh
o Actual gratuity received
o Half month average salary for every year complete service on the basis of
average salary drawn during 10 month immediately preceding the month
of retirement
Average salary X 1 X number of year
2

PENSION
Any amount received by employee from employer on regular basis on lump sum basis for past
services and can be legally claimed termed as pension there are two kinds of pension

a. Uncommuted pension:- Fully taxable wheather the employee is a government or non

government employee
b. Commuted pension :- When employee received amount on lump sum basis at the time
of retirement
Rules regarding commuted pension
· For government employee it is fully exempted
· For non government employees
o If gratuity received then exemption amount shall be the 1/3 rd of the total
commuted value of the pension
o If gratuity not received then exempted amount shall be 1/2 nd of the total amounted
value of pension = commuted value
Commuted share
· Taxable commuted pension = actual amount – exempted amount

EXEMPTED INCOME
1. Payment from statutory provident fund
2. Allowance of M.P and M.L.A
3. Agricultural income
4. Perk/ Perquisites
5. Rent free accommodation
6. House rent allowance
7. Leave in cashment
 8. Income of consultant
INCOME FROM HOUSE PROPERTY

 Municipal rental value:- A value which is fixed by municipal authorities of that area
termed as municipal rental value.
 Fair rental value:- A value of property can be fairly let out or fairly treated known as fair
rental value
 Standard rent:- A value which is fixed under rent contract act known as standard rent
 Factor rent:- It is that value which comes by considering various factors relating to that
period.

 ALCULATION OF INCOME FROM HOUSE PROPERTY

 CAPITAL GAIN
This is the fourth head of income chargeable to tax as given in the section 14

Short term capital assets

Short term capital is that in which is held by assesses for not more than 36 months immediately
presiding the date of its transfer. In case of share and security not more than 12 months. Any
gain and loss raised due to exchange of short term capital assets known as capital gain and loss.

Long term capital assets

It is that assets which is held by an assesses more than 36 months immediately preceding the
date of transfer in case of share and securities more than 12 months any gain or loss arised due
to exchange of long term capital assets is known as long term capital gain and loss

Capital gain exempted under 10(36)

Income from sale of share in certain case under section 10(36) if a company purchase on or
after 1st march 2003 and before 1st march 2004 and held for 12 months or more than full mount
is exempted for tax at the time of sale

Capital gain exemption under section 10 (37)

Capital gain or compulsory acquisition of urban agricultural land if any individual and HUF and
any income charge able under the head capital gain arising from transfer of agricultural land of
urban areas shall be exempted land which situated with in the municipal limits on with in the
municipal limits. It is notified by tax department.

Capital gain exemption under section 54

section 54 provide exemption in long term capital arising or certain capital assets the assesse
can claim this exemption in particular specified assets that capital gain those exemption are
covered under section 54, 54B, 54D, 54F, 54EC,54G, 54GA.

1. Capital gain on transfer of long term residential house property under section 54 :-
When on the transfer of house property which is taxable under the head of income from
 house property owned by individual and HUF. Under this situation when assesse occur
capital gain and that capital gain is reinvested in.

2. Capital gain of self cultivated agricultural land in urban area under section 54B: - When
on the transfer of agricultural land being used for agricultural purpose by the assess for
the period of at least two years immediately proceeding the year of transfer.
3. Capital gain on the acquisition of land and building under section 54D:- When the capital
gain arises from the transfer of land and building and being that assets used by assess
for two years proceeding the previous year.
4. Capital gain on transfer of any long term capital asset under section 54EC ;- In case the
capital gain arises from the transfer of long term capital assets and the assets has invest
that amount with in the period of 6 months in national highway authority of INDIA
Owned after the date such transfer
5. Capital gain on sifting industrial undertaking from urban areas to non urban area under
section 54G:- capital gain is transfer due to sifting of industrial undertaking urban area
to rural area. Capital gain is reinvested within the period of one year before or three
year after the date of transfer.
6. Capital gain on transfer of assets in case of shifting of industrial undertaking from an
urban area to any special economic zone under section 54GA:- Capital asset is transfer
due to shifting of industrial undertaking urban to special economic zone area. Capital
gain is re invested with in the period of 1 year before 3 years after the date of transfer.

PROFITS AND GAINS OF BUSINESS OR PROFESSION

Under section 28 to 44DB of income tax act 1961 profit and gain of profession or business from
part of total income of an assesse this head is the most important sources of tax collection for
the government. The computation of income under this head is very complex and difficult
method but before going into collection of income under this head it is necessary to under
stand the meaning of team used in this head

Business:- Business under section 2 subsection 13 simple means any economic activity carried
on for earning profits section 2 subsection 13 has defined the term as any trade commerce
manufacture or any adventure or concern in the nature of tread commerce and manufacture.
In the word of justice SR DASS the word business con not some real substantive and systematic
or organized course activity or conduct with set purpose.
Profession:- Profession section 2 subsection 36 is occupation requiring purely intellectual
skill or manual skill controlled by the intellectual skill of the operator example lawyer,
accountant, author etc. So profession refers to those activities where the livelihood is earned by
the persons through their intellectual or manual skill. Under section 2 subsection profession
includes vocation.

Section30:- Rent, Rates and taxes, insurance, repair of building all expenses are allowed if
incurred by tenant. If assesses run his own income in his owned income in his own building
then rent not to be allowed but all other expenses to be allowed.

Section31:- Repair, insurance of plant , machinery , furniture to be allowed.

Section32:-Depreciation decrease in the value of asstes due to wear and tear it is allowed on
capital assets only.

Section35(a):- Expenses incurred on occurring patent right copy right .Rule depreciation to be
allowed at 25%.

Sectio35a©:- Contribution given to approved body for eligible skim or project. Rule is that
100% of actual amount is allowed.

Section 35 a(d);- In case assesses who start a specified business 100% expenses is allowed. In
case are not sufficient to above this deductions then it is to be Cary forward until fully
exempted but can be set off only from the specified business

Section 35 cc(a):- Contribution given to rural development project or to rural development land
100% amount allowed.

Section 35D:-Amortization of preliminary expenses market serve project reports physically

reports engineering service for company expenses on formation registration of company
drafting and printing of MOA AOA printing of prospectus expenses on issue of share.

Section 36:-

· Insurance premium in respect of stock and trade health of employee all are allowed.
· Bonus and commission to the working employer is allowed.
· Interest or borrowing money is allowed.
· Interest paid before installation of plant and machinery is to be capitalized
· Contribution by employer towards gratuity fund statutory provident fund
· RPF super accretion provident fund is allowed
 INCOME FROM OTHER SOURCES
Taxes always applicable or assesses total income and that total income is calculated by 5 heads
that are salary income, house property income, business and professional income, capital gain
and income from other sources. Income from other sources are that income which is not
included into previous heads

Types of Income from other sources

General income under section 56(1):-

 University remuneration
 Director fees
 Ground fees
 Tip received by waiter or tax drive not given by his employers
 Income received from subletting of the house
 Income from agricultural land situated out side India
 Management consultation fee
 Income from non agricultural land

Specified income under section 56(2)

 Dividend
 Any winning from lotteries cross world puzzles races including house race card game
and other games
 Any income by way of interest on securities if the income is not charge able to tax under
the head profit or gains of business and profession
 Any sum received under a key man insurance police including bonus if such a sum is not
taxable as salary or business income
 Where an assesses lets on hire machinery plant and furniture belonging to him and also
building and letting of the building is inseparable from the letting of a said machinery
plant and furniture the income from much letting if it is the not chargeable to the
income tax under the head profit and gains of the profession
 How to find out Income tax
1.A person aged less the 60 years having income of Rs.430000. Find tax to be charged.

Income = 430000
0 – 2.50 lakhs. = Nil
2.50 lakhs – 430000lakhs =180000× 10% = 18000
+EC(2%) = 360
+HEES(1%) = 180

Total Income Tax = 18540

2.A person aged more than 60years but less than 80 years

having income 770000.Find out amount of income tax.

0- 3 lakhs = Nil
3lakhs- 5lakhs = 2,00,000×10% = 20000
5 lakhs- 7,70,000lakhs = 270000×20% = 54000
+EC(2%) = 1080
+HEES(1%) = 540

Total Income Tax = 55620

3. A Indian company having income of Rs.10100000. Find out amount of IncomeTax.

10100000× 30% = 3030000

+Surcharge 5% = 15500

total = 3181500

+EC(2%) = 31815

+HEEC(1%) = 93630

Total Income Tax = 3276945

4. A forgien company having income of Rs. 10050000. Find out the amount of income tax.

10050000× 40% = 4020000

+ Surcharge 2% = 80400
+ EC (2%) = 82008

+ HEEC (1%) = 41004

Total Income Tax = 4223412

5. A person aged more 80years having income of Rs. 1030,000. Find out the amount Income
Tax to be charged.

0- 5lakhs = Nil

5lakhs- 10lakhs =

500,000× 20% = 100000

More than 10 lakhs =

30,000× 30% = 9000

+ EC (2%) = 2180

+ HEEC (1%) = 1090

Total Income Tax = 112270

What is Marginal Relief…..

It is relief given as per Income Tax and Wealth Tax Act. It is given to the person whose taxable
income exceeds certain limit marginally but tax on the income bring his after tax balance below
the lower level slab. In that case he his relief so that his below the lower tax slab.

Take an Example :

Person X has income of Rs. 10lakhs & person Y has income of Rs.1010000, X will pay tax of
Rs. 25500/- & after tax balance in his hands will be Rs.745000/- where as Y will be taxed
Rs.716500/- as after tax balance in normal course which means he is virtually penalised for
earning 10,000/- more he is charged with additional 28500/- which is not fair. This happens due
to the surcharge which is applicable only if income exceed Rs. 10, 00,000/-. So to give him (to Y)
little relief, he is charged tax of Rs.265200/- which will leave after balance amount of
Rs.744800/- in his hands. This thing happens till the income of Rs. 1030,000 + (little over). After
that thereremains no necessity of giving any relief. I have included Educational Cess on tax in
total tax in total tax above. The Educational Cess is not covered for original tax plus surcharge
only.
A person having income of Rs.10001000. Find out amount of Marignalrelief & Income tax to be
paid by him.

10001000×30% = 30003000
Surcharge 5% = 150015
Total = 3150315

Tax on total Income = 3150315

-Tax on 1 Crore = 30,00,000

Remain = 150315

-Income Excess from 1cr = 1000

Marginal Relief = 149315

Income Tax = 3150315

-Marginal Relief = 149315

Tax to charged = 3001000

+ EC (2%) = 60020

+ HEEC (1%) = 30010

Total Income Tax = 3091030

Types of Income Tax Return Forms

To file tax returns Income Tax Department had issued a series of forms applicable to different
type of assessees:

ITR 1: This form is applicable for an individual who has no income other than Salary/
Pension and Interest.

ITR 2: This form is applicable for an individual who has income under different heads but not
business /profession income.

ITR 3: This form is applicable for an individual who is partner in a partneshipfirm.

ITR 4: This form is applicable for an individual who has income from business/profession.
ITR 5: This form is applicable for a Firms, AOP,BOI, Local Authority.

ITR 6: This form is applicable for a Company.

ITR 7: This form is applicable for a Trust.

Deductions on Section 80C, 80CCC & 80CCD

Section 80C

This section has been introduced by the Finance Act 2005. Broadly speaking, this section
provides deduction from total income in respect of various investments / expenditures /
payments.

1. Life Insurance Premium for individuals. The policy must be in the assesse's or spouse's or
any child's name. For a HUF, it may be on life of any member of HUF. The 80C deduction is
valid on insurance policies purchased after 1st April, 2012 only if the premium is less than
10% of sum assured. Benefits for existing purchased policies continue.
2. Sum paid under contract for deferred annuity for an individual on the life of the assesse,
spouse or any child.
3. Sum deducted from salary payable to Govt. Servant for securing deferred annuity for self-
spouse or child Payment limited to 20% of salary.
4. Contribution made under Employee's Provident Fund Scheme.
5. Contribution to PPF for individual can be in the name of the assesse, the spouse or any
child. For a HUF, it can be in the name of any member of the family.
6. Contribution by employee to a Recognised Provident Fund.
7. Sum deposited in 10/15 year account of Post Office Saving Bank
8. Subscription to any notified securities/notified deposits scheme. e.g. NSS
9. Subscription to any notified savings certificate, Unit Linked Savings certificates. E.g. NSC VIII
issue.
10. Contribution to Unit Linked Insurance Plan of LIC Mutual Fund e.g. Dhanrakhsa 1989
11. Contribution to notified deposit scheme/Pension fund set up by the National Housing
Scheme.
12. Payments of instalments or part payments of loan taken for buying or constructing
residential house property. However, if the property is transferred before the expiry of 5
years from the end of the financial year in which possession of such property is obtained by
him, the aggregate amount of deduction of income so allowed for various years shall be
liable to tax in that year.
13. Contribution to notified annuity Plan of LIC (e.g. JeevanDhara) or Units of UTI / notified
Mutual Funds.Note if in case of such contributions the deduction under Section 80CCC has
already been availed, the rebate under Section 88 would not be allowable.
14. Subscription to units of a Mutual Fund notified u/s 10(23D).
15. Subscription to deposit scheme of a public sector, company engaged in providing housing
finance.
16. Subscription to equity shares/ debentures forming part of any approved eligible issue of
capital made by a public company or public financial institutions.
17. Tuition fees paid to any school, college, university or other educational institution situated
within India for the purpose of full time education of any two children

Section 80CCC: Deduction in respect of Premium Paid for Annuity Plan of LIC or Other Insurer

Payment of premium for annuity plan of LIC or any other insurer Deduction is available upto a
maximum of Rs. 150,000.
The premium must be deposited to keep in force a contract for an annuity plan of the LIC or any
other insurer for receiving pension from the fund.

Section 80CCD: Deduction in respect of Contribution to Pension Account

Deductions to the extent of 10% of one's salary are available on deposits made by a Central
government servant in one's pension account.
If the Central Government makes any contribution to the pension account, deduction of such
contribution to the extent of 10% of salary shall be allowed. Further, in any year where any
amount is received from the pension account such amount shall be charged to tax as income of
that previous year.
Remember: The limit for maximum deduction available under Sections 80C, 80CCC and 80CCD
(combined together) is Rs. 1, 50,000/- (Rs. one lac Fifty thousand only)
 INTRODUCTION TO GST
Goods and Service Tax (GST) is an indirect tax (or consumption tax) levied in India on the sale of
goods and services. GST is levied at every step in the production process, but is refunded to all
parties in the chain of production other than the final consumer.
Goods and services are divided into five tax slabs for collection of tax - 0%, 5%,
12%,18%and28%. Petroleum, alcoholic drinks, electricity, and real estate are taxed separately
by the individual state governments.[citation needed] There is a special rate of 0.25% on rough
precious and semi-precious stones and 3% on gold. [1] In addition a cases of 22% or other rates
on top of 28% GST applies on few items like aerated drinks, luxury cars and tobacco products.
[2]
 Pre-GST, the statutory tax rate for most goods was about 26.5%, Post-GST, most goods are
expected to be in the 18% tax range.
The tax came into effect from July 1, 2017 through the implementation of  One
Hundred and First Amendment of the Constitution of India by the Modi government. The tax
replaced existing multiple cascading taxes levied by the central and state government The tax
rates, rules and regulations are governed by the GST Council which comprises finance ministers
of centre and all the states. GST simplified a slew of indirect taxes with a unified tax and is
therefore expected to dramatically reshape the country's 2.4 trillion dollar economy. [3] Trucks
travel time in interstate movement dropped by 20%, because of no interstate check posts. [4]
India proposed to have a dual GST set up in 2017, which will be the biggest
reform in the country’s tax structure in decades. The main objective of incorporating the GST is
to eliminate tax on tax or double taxation, which cascades from the manufacturing level to the
consumption level. For example, a manufacturer that makes notebooks obtains the raw
materials for, say, Rs. 10, which includes a 10 percent tax. This means that he pays Rs. 1 in tax
for Rs. 9 worth of materials. In the process of manufacturing the notebook, he adds value to the
original materials of Rs. 5, for a total value of Rs. 10 + Rs. 5 = Rs. 15. The 10 percent tax due on
the finished good will be Rs. 1.50. Under a GST system, this additional tax can be applied
against the previous tax he paid to bring his effective tax rate to Rs. 1.50 - Rs. 1.00 = Rs. 0.50.
 TAX STRUCTURE
 Indirect tax:
Indirect tax is a type of tax collected by the government from an intermediary such as
manufacturer or retailer. The eventual burden of the tax falls on to consumers who buy goods
and services from the intermediary. It includes:-

1) Intra state
2) Inter state

Intra state includes CGST (central goods and service tax) and SGST (state goods and service tax).
On the other hand it include IGST (intra state goods and service tax)

 Direct tax:
It is levied directly on individuals and corporate entities. This tax cannot be transferred or borne
by anybody else. There are 17 direct taxes. Income tax is the most popular tax within this
section. Levied on individuals on the income earned with different tax slabs for income levels .It
includes:- Income tax , Capital gains , Gift tax and Corporate tax

Difference between Direct Tax and Indirect Tax:

There are different implications of direct and indirect taxes on the country. However, both
types of taxes are important for the government as taxes include the major part of revenue for
the government.

Key differences between Direct and Indirect Tax are:

1. Direct tax is levied and paid for by individuals, Hindu undivided Families (HUF), firms,
companies etc. whereas indirect tax is ultimately paid for by the end-consumer of goods and
services.
2. The burden of tax cannot be shifted in case of direct taxes while burden can be shifted
for indirect taxes.
3. Lack of administration in collection of direct taxes can make tax evasion possible, while
indirect taxes cannot be evaded as the taxes are charged on goods and services.
4. Direct tax can help in reducing inflation, whereas indirect tax may enhance inflation .
 COMPONENTS OF GST

CGST- Stands for Central Goods and Services Act. The central government collects this tax on an
intrastate supply of goods or services.

SGST: Stands for State Goods and Services Tax. The state government collects this tax on an
intrastate supply of goods or services.

IGST: Stands for Integrated Goods and Services Tax. The central government collects this for
inter-state sale of goods or services.

SGST IGST
CGST
• Levied on all inter –
• Replace State Vat,
state supplies of
 Replace central
Entry Tax, goods or services
Excise Duty & service which are sold or
Entertainment Tax, & transferred.
Tax.
Luxury Tax.
• Applicable to imports

 Administered by CG • Cover taxing of of goods or services

 Further it is expected Services

that the duty and tax
paid on closing stock  Administered by SG
would be available as Rate can be a bit
credit. higher than CGST
rate .
 APPLICABILTY OF GST

 GST on Exports is zero rated, but on the

other hand in “import” IGST will be levied.

 Tobacco products should be in the frame of GST.

 In fact, Gov. Can levy extra % of tax apart from GST .

 Full exemption is applicable on basic necessities goods like Flour ,rice, pulses, textiles,

buildings, education & healthcare etc

 Gross Turnover of Goods up to Rs. 1.50 cr may be assigned exclusively to the states.
 Gross Turnover of Services up to Rs. 1.50 cr may be assigned exclusively to the center.
  Assessed can have an option to pay tax as per composition scheme or may join the GST

law whose turnover is up to Rs. 1.50 cr .But, those assessed whose turnover is and above

Rs. 1.50 Cr will need to be within the framework of GST.

TAX INCLUDED & NOT BE INCLUDED

TAX INCLUDED IN GST
The taxes which are being included in Central GST are:
 Additional Customs Duty

 Central Excise Duty (CENVAT)

 Additional Excise Duties

 Special Additional Duty of Customs 4%

 Service Tax
In State GST, there are various taxes which includes:
 Luxury tax

 Entry Tax

 Purchase Tax

 VAT / Sales tax

 Entertainment tax (unless it is levied by the local bodies)

TAX NOT BE INCLUDED

The following tax and product types are not covered under GST. Business owners making sales
or purchases of these products should make sure they understand the specific tax requirements
that will still be imposed beyond GST assessments.

Tax on items containing alcohol:-

Alcoholic beverages for human consumption would be kept out of the purview of GST as an
exclusion mandated by constitutional provision. Sales Tax/VAT could be continued to be levied
on alcoholic beverages as per the existing practice. VAT is levied on alcohol purchases in some
states, and there will be no objection to that. Excise duty, which is presently levied by the
states, may also be unaffected.

Tax on Petroleum Products

The full range of petroleum products, including crude oil and motor spirits including Aviation
Turbine Fuel (ATF) and High Speed Diesel (HSD), would be kept outside GST, as is the prevailing
practice in India. Sales tax could continue to be levied by the states on these products with the
prevailing floor rate. Similarly, Centre could also continue its levies. A final opinion on whether
natural gas should be kept outside the GST will be issued after further deliberations.

As for petroleum products, although the GST constitutional amendment provides for levying
GST on these products, it allows the timeframe for their inclusion to be decided by the GST
Council. Therefore, in the initial years of GST, petroleum products will remain out of the scope
of GST.The existing taxation system under VAT and the Central Excise Act will continue for both
of the commodities listed above.

Why this exclusion

VAT or sales tax on petroleum products contributes to nearly 33 percent of state revenues, and
Centre also earns significant excise duty income on the generation of petroleum products from
crude oil. To protect these significant revenue interests, both the Governments want GST to
first stabilize before they allow the GST Council to consider their inclusion.

Similarly, for alcohol, states don’t want to lose the significant revenue currently earned from
state excise duty. In many states, the revenue from state excise taxes imposed on alcohol
brings in 25 percent of total revenue. For this reason, the state excise tax on alcohol has been
kept out of the constitutional mandate for levying GST.This decision was made to provide fiscal
security to states and ensure that there is a minimum guaranteed income under the proposed
GST regime.

Impact of such exclusions

Any planning for GST has to take into consideration the non-availability of credits for taxes paid
on petroleum products, though these products are inputs for most business activities. Major
taxes paid on inputs won’t be eligible for ITC, so they will remain part of the cost of production
and sales, as they are now.Such exclusions negate, to some extent, the pros of unification,
giving rise to one more layer of complexity when it comes to tax compliance for business
organizations. Manual handling of these transactions can lead to wasted time and manpower,
and these calculations are prone to errors. Using automated solutions for indirect tax
compliance — including GST and all other products outside GST — is the fastest and most cost-
effective way to solve this problem.

IMPACT OF GST

Impact of GST in India. Amidst economic crisis across the globe, India has posed as a beacon
of hope with ambitious growth targets, supported by slew of strategic missions like ‘Make in
India’, ‘Digital India’, etc. Goods and Services Tax (GST) is expected to provide the much
needed stimulant for economic growth in India by transforming the existing basis of indirect
taxation towards free flow of goods and services within the economy and also eliminating the
cascading effect of tax on tax. In view of the important role that India is expected to play in the
world economy in the years to come, the expectation of GST being introduced is high not
onlywithin the country, but also in neighboring countries and in developed economies of the
world.check more details about “Impact of GST on Indian Economy” from below…..The
introduction of Goods and Services Tax on 1 st of July 2017 was a very significant step in the
field of indirect tax reforms in India. By amalgamating a large number of Central and State taxes
into a single tax, the aim was to mitigate cascading or double taxation in a major way and pave
the way for a common national market. From the consumer point of view, the biggest advantage
would be in terms of a reduction in the overall tax burden on goods, which was estimated to be
around 25%-30%. Introduction of GST would also make Indian products competitive in the
domestic and international markets. Studies show that this would have a positive impact on
economic growth. Last but not the least, this tax, because of its transparent and self policing
character, would be easier to administer . Following are the some points which explain the
impact of GST in INDIA:-

(a) Increased FDI:  The flow of Foreign Direct Investments may increase once GST is
implemented as the present complicated/ multiple tax laws are one of the reasons foreign
Companies are wary of coming to India in addition to widespread corruption.

(b) Growth in overall revenue:  It is estimated that India could get revenue of $15 billion
per annum by implementing the Goods and Services Tax as it would promote exports, raise
employment and boost growth. Over a period, the dilution of the principles may see that only
part of this is accruing.

(c) Single point taxation:  Uniformity in tax laws will lead to single point taxation for
supply of goods or services all over India. This increases the tax compliance and more assesses
will come into tax net.

NEED OF GST
1) Tax Structure will be Simple: – At present, there are huge number of taxes that has to
pay by consumers, with GST it will single tax to pay, which is much easier to understand.
For businesses, accounting complexities will reduce and results less paperwork, which
will save both time and money. GST will increase economic GDP by 2%-2.5%.
2) Tax revenue will increase: Simple tax structure will bring more tax payers and in return
it will be revenue for government.
3) Competitive pricing: What GST will do? Well, it will eliminate all other taxes of indirect
taxes and this will effectively mean that tax amount paid by end users (consumers) will
reduce. As in Economics, lower will the prices, more will be demand for that product,
results in more consumption of goods, which will be benefited to companies.
4) Boost to exports: If Indian market will be competitive in pricing, then more and more
foreign players will try to enter the market, which results in more numbers of exporters
and benefits to Indian Market. As far there is no tax rate is finalized, but yes GST is much
needed in the countries where, it lacks transparency and complex taxation system.
 RATES UNDER GST

 5% GST on agricultural, medicines and daily needs products

 12% GST on utility items like salt, biscuits, computer parts etc
 18% GST on manufacturing and services like air travelling, hotel stay, cars etc
 28% GST on luxury items like expensive cars, expensive perfumes, etc
 No GST on products like petroleum and alcohol

GSTIN (GST CODE)

GST is a newly passed bill which calls for a common tax over the nation and just one single type
of tax filtering ll the extra and indirect taxes.  It will replace VAT, service tax and excise in every
business that will have to mandatorily register under it. The cost of tax on all commodities is
expected to go down after the implementation of GST this is because GST eliminates tax on tax
and provides tax credit adjustment without breaking credit chain. For example currently when a
manufacturer sells to a trader he charges him excise, when the trader sells again he charges
VAT but cannot adjust the excise credit against it. This causes the excise paid by him to be
added to his cost. But, after GST manufacturer sells to trader and charges him GST. When the
trader sells again he charges GST and avails input tax credit thereby, eliminating the taxes paid
becoming a cost. (GST identification number)

 Every tax payer will be assigned a state-wise PAN based GST tax payer identification
number (GSTIN) which will be 15 digit long.
 The first two digits of GSTIN will represent the state code according to Indian Census of
2011. Each state has a unique two digit code
 The next 10 digit of GSTIN will be the pan number of the tax payer

(The GST code will be an alpha numeric number i.e first 1-9 and then A-Z it will be allotted on
the basis of number of registrations a legal organization, company, etc has within one state. )

 The fourteenth digit currently has no use and therefore will be Z by default.
 The last digit will be a check code which will be used for detection of errors.
 , the following is the format for the India GST number that contains the Indian State
Code, the Indian PAN number and the other values.

State code PAN no. Entity code blank

2 digits 10digits 1digit 2digits

 BENFITES OF GST
1) The unity of tax rates has brought a lot of cleanliness into the system and likewise reduced the
paperwork. The main advantage of this is that it will definitely narrow down the complexity and
in turn will give fast and secured manner of the transaction.
2) One of the main benefits of the Goods and service tax in India that it will remove the value
addition of every product and therefore remove the cascading effect which burdens the final
price of the product.
3) The online method of tax framework will certainly bring a transparency and will also find out the
source of any tax leakage as the transactions can be monitored and will improve in helping
overall tax collection
4) A single platform for both SGST and CGST is a great concept to fulfill the taxation process as the
taxpayers will be able to return the taxes with a single click which will surely count as productive
and feasible. The taxpayers would not be required to maintain records and show compliance
with a myriad of indirect tax laws of the Central Government and the State Governments like
Central Excise, Service Tax, VAT, Central Sales Tax, Entry Tax, Luxury Tax, Entertainment Tax, etc
5) GST is a win-win situation for the entire country. It brings benefits to all the stakeholders of
industry, government and the consumer. It will lower the cost of goods and services, give a
boost to the economy.
6) Goods and Services Tax has changed the face of indirect tax regime in the nation. It has
subsumed several indirect taxes and therefore simplified taxes for businesses and compliance
easier.

LIMITATION OF GST
1) According to the experts, terms such as GST which includes CGST, SGST, and IGST is nothing but
just a new name in accordance with the existing tax systems. Kind of old wine in a new bottle.
2) The Service Tax which stood at 15% in the previous regime, has now been replaced with GST at
18%. As such many services have become costlier with telecom, airline and banking affected
majorly. In fact, insurance and petroleum are also said to be majorly affected by the enactment
of GST Tax.
3) The GST Act has given the control of businesses to Central and State Governments with
businessmen binding by-laws. This has given rise to complexity for many businessmen across the
nation.
4) Post GST implementation, the first few instances of application have resulted in high tax outgo
for businesses. Businesses are trying to claim the credit of input tax but several cases of
mismatch of data are coming up. As a result, there is chaos among the tax filers.
5) The opposition has called it as a Disability Tax as many of the things related to disabled people
which were earlier tax-free are now included in GST taxation. Prior to implementation of GST,
brail paper, typewriter, hearing aid and motorised wheelchair were tax-free whereas these
things are being taxed now. The opposition has made pleas to roll back the tax on such items.
 INTODUCTION TO TALLY ERP9.
Tally is powerful accounting software, which is driven by a technology called concurrent multi-
lingual accelerated technology engine. It is easy to use software and is designed to simply
complex day to day activities associated in an enterprise. Tally provides comprehensive solution
around accounting principles, inventory and data integrity. Tally also has feature encompassing
global business. Tally software comes with easy to use interface thus making it operationally
simple.

Tally accounting software provides a solution around inventory management, stock

management, invoicing, purchase order management, discounting, stock valuation
methodology, etc.

Tally accounting software also comes with drill down options, which can track every detail of
transaction. It helps in maintaining simple classification of accounts, general ledger, accounts
receivable and payable, bank reconciliation, etc.The technology employed by tally makes data
reliable and secure. Tally software supports all the major types of file transfer protocols. This
helps in connecting files across multiple office locations.

Tally accounting software is capable of undertaking financial analysis and financial

management. It provides information around receivables turnover, cash flow statement,
activity consolidation and even branch accounting.

Tally accounting software is east to set up and simple to use. A single connection can support
multiple users. It can be easily used in conjunction with the Internet making possible to publish
global financial reports.Tally accounting software can seamlessly connect with various Microsoft
applications.

FEATURES OF TALLY ERP 9

 Simplicity : Tally.ERP 9 is simple, easy to setup and use. It also allows easy
Keyboard operations. It requires basic knowledge of Accounts and English to use it.

 Auditor's Edition : Tally.ERP 9 offers a special Auditors' Edition of Tally.ERP 9,

which provides auditing and compliance capabilities exclusively for Chartered
Accountants.

 Support Centre : allows a user can directly post his support queries on the
functional and technical aspects of the Product.
 Control Centre : works as an interface between the user and Tally.ERP 9
installed at different sites and enables the user to centrally configure and administer
Site/User belonging to an account.

 Remote Access : Tally.ERP 9 provides remote capabilities to access the data from
anywhere and anytime.

 Online Help : The Tally.ERP 9 Online Help (Alt+H) provides instant assistance on
basic and advanced features or any other relevant topics of Tally.ERP 9.

 Technical support : Timely support is available from our experts at the Tally
Service Partners.

 Accounting without Codes : Tally.ERP 9 allows accounting with the regular

names (the way you spell them or use in normal parlance) without any account codes.

 Real time processing : Immediate posting & updation of books of accounts as

soon as the transactions are entered, thereby facilitating instant statements &
Reports. It also faciliaties real-time multi-user environment.

 Concurrent multi-lingual capability : Tally.ERP 9 offers you the exclusive

capability of maintaining your accounts in any Indian language, viewing them in
another language and printing them in yet another Indian language.

 Scalability : Tally.ERP 9 suits to any style of business needs and eliminates the
necessity for a business to change its style of operation, in order to adapt to the
application.

 Flexibility : Tally.ERP 9 provides flexiblity to generate instant reports for any given
period (month/year) or at any point of time besides providing the facility to toggle
between Accounting & Inventory reports of the same company or between
companies.

 Speed : Tally.ERP 9 provides the capability to generate instant and accurate

reports, which assists the management to take timely and correct decisions for the
overall productivity and growth of the company
 INSTALLATION OF TALLY ERP 9
Installation of tally ERP9 Setup
Step 1.

• Double click on the install.exe icon on the CD

step 2.

• click START from windows.

• select RUN

• TYPE<CD drive>;/INSTALL

• press enter key

1. The Tally.ERP 9 Setup Wizard is displayed as shown.

2. Click Next to continue with the installation.
The Tally.ERP 9 Setup screen is displayed as shown

3. Check Single User to install Tally.ERP 9 Single User/Silver Edition on your computer.
4. Click Next
The Tally.ERP 9 Setup screen is displayed as shown.
5. In Tally.ERP 9 Setup screen, you may accept the default directories or click on the buttons
provided to change the path of Application Directory, Data Directory, Configuration
Directory, Language Directory or License Directory respectively.
 Application Directory: Tally.ERP 9 program files reside in this directory.
 Data Directory: Tally.ERP 9 data resides in this directory.
 Configuration Directory: Tally.ERP 9 configuration file reside in this directory.
 Language Directory: Tally.ERP 9 language files (.dct) reside in this directory.
6. Click Next.
The Country/Language Selection screen is displayed as shown.

7. In the Country/Language Selection screen,check Install Operating System Language Support

to install Tally.ERP 9 with multi-lingual support

8. Click Install.

9. The Setup Status screen is displayed as shown.

10. case you are prompted for the language support files in the Files Needed screen, insert
operating systems CD in the drive or click Browse and select the i386 folder where the required
language support files reside on your computer.

11. Click OK to install Language Support.

The Tally.ERP 9 Installed Sucessfully screen is displayed as shown.

In Tally.ERP 9 Installed Successfully screen, Launch Tally.ERP 9? is checked by default.

12. Click Finish to complete installation and start setup Tally.ERP 9
 COMPANY CREATION OF TALLY ERP 9.
Creating a Company involves providing basic information about the company whose books of
accounts are to be maintained in Tally.ERP 9.

Go to Gateway of Tally > (Alt+F3) Company Info. > Create Company

The Company Creation screen appears as shown:

A detailed explanation on each field is given:

Directory
The data path where you want the company to be created is specified in the Directory field.

This field is skipped by default when you create the company in the data path given in
the Tally.INI file. If you want to change it, use the Backspace key and modify it to the path
required.
This is referred to as the Tally Anywhere concept – which is the ability to create/load companies
in separate directories. The Directory field is displayed while selecting Select, Create, Backup,
Restore and Rewrite options for a company. By default, the cursor will skip the field, presuming
that you wish to use the default data directory for your work. You may pressBackspace to give a
new path and work from there.

If your business uses Tally.Server 9 to maintain data,

 Click on S: Server Data Loc. or press Alt+S

 The List of Tally.Server Data Locations is displayed. Select the required location

  Press Enter to continue with Company Creation

Name

Enter the name of the company whose books are being opened. If you are a professional
accountant and are maintaining the books of your clients, give the Client Company's name.

Mailing Name and Address

In addition to the Company Name, Tally.ERP 9 provides the facility to enter the Mailing Name
field. It displays the Company Name by default. You may change it as required, if the mailing
name is different from the Company Name. The mailing name and address details are picked up
for inclusion in any report that needs the company name and address as heading. For example:
Balance Sheets, Statement of Accounts, and so on.

 Tally.ERP's reports print the mailing name and address as given:

 Tally.ERP 9 does NOT restrict the number of lines for the address details. Tally.ERP 9
accommodates all the entered information and vertically compresses the same. 
Statutory compliance for

Select the Country from the List of Countries. The Statutory Features and Base Currency Symbol
are enabled in accordance with the country selected. For example, if the accounts belong to a
company in India, the base currency would be Indian Rupees. The Base Currency will appear
with respect to the Country selected.

Selecting India from the List of Countries brings up a State, Pin Code and Telephone No. field.

State

You can select the appropriate state from the predefined list.

PIN Code

Specify the PIN Code (Postal Index Number) of the specified address.

Telephone

Enter the Telephone number.

Mobile No

Enter the mobile number of the company.

E-mail Address

Enter the E-mail address that will be used to e-mail documents, reports and data from Tally.ERP
9.

Currency

Currency symbol is the symbol of the base currency, that is, the currency that will be used to
maintain the books of account.

The symbol ` appears by default in case India for India/SAARC Companies and the field is left
blank for International Companies.

Click here to read about Indian Rupee Symbol Conversion.

Maintain

Tally.ERP 9 displays a drop down for the Type of Company with two options Accounts
only and Accounts with Inventory

Select Accounts only if you do not have any inventory transactions (suitable for professionals
and corporate offices).

However, at a later date (if required) you can choose to alter the information as Accounts-with-
Inventory. Select Accounts-with-Inventory, to maintain both financial accounts and inventory.

Financial Year From

In most countries, the books of accounts of a company are maintained for a stipulated period
like, 12 months, 15 months, and so on.  This stipulated period is referred to as the Financial
Year.

The stipulated period of the financial year is 12 months in most countries. Tally.ERP 9
automatically considers 12 months from the date you give here as the Financial Year.

For example, if you enter April 1, 2008 as the date, the Financial Year will be from April to
March ending with March 31, 2009. If you enter October 1, 2008 as the Financial Year From
then the financial year will be from October 2008 to September 2008 ending with 30th of
September every year.

Tally.ERP 9 allows you to maintain data for multiple years by changing the period (Alt+F2) at the
Gateway of Tally. In addition, you can also specify the date of actual establishment of the
company (date of incorporation)

Books Beginning From

Tally.ERP 9 presumes that you wish to maintain books from the beginning of the financial year.
Hence, Tally.ERP 9 displays the date given in Financial Year From field automatically.

The date for Books beginning from can be changed, in case of companies, which are
incorporated in the middle of the year. If your company is new, you can opt to start the books
of accounts from the date of actual establishment of the company (date of incorporation) but
close books according to the Financial Year as specified by you. Tally.ERP 9 provides the
required flexibility in such a case by allowing you to give the date when the books of accounts
actually began. Tally.ERP 9 will open books from this date and close as on the last day of the
Financial Year.
For example, if your company is established on August 19, 2008, the opening balances for all
the accounts can be given as on August 19, 2008 even though the Financial Year given is April 1,
2008 (April to March financial year). The company's books will begin on August 19, 2008 and
close on March 31, 2009, which ensures smooth transition to the next year.

This concept can be applied even when you are migrating to Tally.ERP 9 from any other system
or from a manual accounting system on any day during the Financial Year. Close books in that
other system on the previous day and start books on Tally.ERP 9 from this day. You are allowed
to give opening balances of all Ledger accounts including Revenue accounts.

TallyVault Password

TallyVault is an enhanced security system, which allows for encryption of the company data.
Encryption involves converting normally accessible Tally information into unrecognisable
information, which can only be reconverted by authorised persons.

Give a password here and repeat the same in the Repeat field. This basically results in the
creation of an encrypted company whose information is not accessible to users other than the
password holder.

 Password Strength

Password Strength indicator is available in Tally.ERP 9 from Release 4.5 onwards. Now,

strength is displayed while creating / altering passwords under Security Control, Tally Vault, and
Control Centre. Also when Password Policy is enabled, Password Strength is indicated in the
Change Password screen that appears for first time login.  

Let us understand the logic used by Tally.ERP 9 to ascertain a password’s strength. This logic
consists of two sets of conditions to be applied.

A. Password Score

Password strength is decided on the basis of a 5 score scale -

Score Strength
1 Weak
2 Fair
3 Good
4 Strong
5 Very Strong
 1. As soon as a character is entered, the score becomes 1 (i.e. weak)

2. The score then keeps incrementing by 1 unit if any of the following conditions match:

o If password has both lower and uppercase characters

o If password has at least one number

o If password has at least one special character

o If password length is greater than 10

Once the score has been obtained, the next set of conditions is applied,

o If password length is less than 8 characters, irrespective of the strength

determined in the first step, the score changes to 1

o If password length is less than 12 but greater than 8, and score is greater than 3,
the score is rounded off to 3

o If password is same as the login name of the person, the score changes to 1

Based on the final score, the strength is displayed to the user accordingly.

For example, in Company Creation screen under Security Control, if the Login Name of

Administrator is Ajay and password provided is Tally.123, then applying Password Score-

1 point is awarded for each of the conditions met:

o Entering a character

o Using a combination of Lowercase and Uppercase character – “Tally”

o Using more than one number – “123”

o Using a special character – “.”

Hence the total score = 1+1+1+1, that is 4.

Now the second set of conditions, that is Password Length and User Name match is to be
applied.

B. Password Length and Username match

It can be observed that only the second condition is applicable to our example. Since length is 9,
that is, greater than 8 but lesser than 12, the score is rounded off from 4 to 3.
Therefore, as per this example, the net score is 3 and hence the strength attributed to the
password is Good.

Use Security Control?

Set this to Yes, if you want to initiate a password-protected system to control access to
Tally.ERP 9 data. Else, set this to No.

If you opt for security control, Tally.ERP 9 offers a comprehensive password based access
control to different features of Tally.ERP 9 based on authority lists created by the
Administrator. For more information refer Data Management in Tally.ERP 9.

 Name of Administrator, Password, Repeat

Assuming the Tally Vault Password and Use Security Control is set to Yes enter the Name of
Administrator, Password and Repeat in the respective fields.

Use TallyAudit Features

Tally Audit allows the administrator or an auditor profile user to track changes in accounting
information. If you wish to use this facility, select Yes. Tally Audit will be available only to the
administrator/auditor, through Display of Statements of Accounts.For more information refer
Data Management in Tally.ERP 9.

Disallow opening in Educational mode ?

Set this option to Yes, if you don't want the company to be opened in Educational mode of
Tally.ERP 9. Else, set this to No.

On accepting the company creation screen, if you have specified Tally Vault password,

Tally.ERP 9 prompts you to enter the TallyVault password as appears:

 Then Tally.ERP 9 prompts you to enter the Name of User and Password (if any).

 After verification Tally.ERP 9 imports the latest statutory masters. Wait till the screen shows
that 100% of import is complete.

This completes the Company Creation process in Tally.ERP 9

Base Currency Information

The Base Currency Information is found in the bottom frame of the Company creation Screen.
Base Currency is the currency in which your accounts would be maintained. Financial
statements are prepared in the base currency by default and these are normally required to be
submitted to local statutory authorities. The Base Currency information in Tally.ERP 9 varies
with the country selected for Statutory Compliance.

You can record transactions and raise invoices in foreign currency; and also maintain bank
accounts or ledgers in foreign exchange, when required.
Base Currency Symbol

The currency symbol given earlier in the Company Creation screen is displayed here

automatically.

Tally.ERP 9 uses this currency symbol in reports, wherever necessary.

Click here to read about Indian Rupee Symbol Conversion.

Formal Name

Formal Name is the full name of the currency specified.

The Formal Name for the base currency is set to Indian Rupees for Indian Companies.

Number of decimal places

The number of decimal places for the base currency is set to 2, by default. However, you have
the option of specifying up to 4 decimal places. Indian currency has 2 decimal places whereas
certain other countries require 3 decimal place.

Show Amounts in Millions

This is useful for companies, which require reporting the financial statements in millions. This is
possible only if Allow Multi-Currency is enabled in F11: Accounting Features.

Put a space between Amounts and Symbol

This facility is provided to users who require a space between the amount and the symbol.
However, putting a space between the amount and symbol could give an opportunity for
misuse incase of cheque printing. Hence, the flexibility to turn this option on and off as required
is provided.

Decimal Places for Printing Amounts in Words

You can specify the number of decimal places for printing the amount in words. This number
should be equal to or lesser than the number specified in Number of Decimal places field in
company creation or currency master screen which will appear in Invoice and Cheque printing
screen.
 ACCOUNTING INFORMATION
1.Create:-creation of new account
2. Display:-Allows you to view the information contained in the master
3. Alter:-Allows you to change information contained in the masters

• Groups creation
1. Single group creation:- In single group creation account group is created one by one.
Steps to create group (single)
A) Open tally ERP 9
B) Gateway of tally menu opens
C) Select acoounting information options
D) Select groups from accounting info. Menu
E) Select create (single group)
F) Then fill group creation form to create ledger such as A/c group name,
Alias, under ,properties of sub-group
G) Press Y or enter to accept screen

2. Multiple group creation:-With the help of multiple group creation option we can create
more than one sub group under any existing or primery group.
 Steps to create multiple groups:
A) Open tally ERP9
B) Gateway of tally menu opens
C) Select accounting information option
D) Select groups from accounting information menu
E) Select create (multiple group)
F) Then fill multi group creation screen like name of group, under group
G) Press Y or enter to accept screen

• ledger creation
Tally provide two type of ledger creation either single ledger or multiple ledger
1.single ledger creation- In single ledger creation account ledger is created one by one
Steps to create to single ledger
TALLY ERP9 → GATEWAY OF TALLY → ACCOUNTS INFO. → LEDGER → CREATE
 2.Multiple ledger creation:-
Steps to create multiple ledger
TALLY ERP9 → GATEWAY OF TALLY → ACCOUTS INFO. → LEDGER→ CREATE (MULTIPLE)
 INVENTORY INFORMATION
Steps to create stock items
• From gateway of tall
• Go to Inventory Info.
• Then, go to Stock Items
•Then, select Create under Single Stock Item

Steps to create stock group

• From Gateway of Tally,
• Go to Inventory Info.
• Then, go to Stock Groups
• Then, select Create under Single Stock Group

Stock item screen look like the following;-

Stock group screen look like the following:-

Creation of Voucher
•Format of vouchers
. Voucher creating screen is divided into three parts:
1. Voucher header :-voucher headercontains the given component
a) voucher type
b) voucher number
c) voucher day and date
2. ledger detail :- this is a tabular area where each ledger transaction and related data is
entered on the voucher.
a) ledger sign
b) ledger account
c) ledger amount
3. voucher footer:-voucher footer contains the bottom part of voucher creation screen.
voucher footer contains only two components.
 a) narration
b) total amount of voucher
:-
•Types of vouchers
There are mainly nine type of vouchers in tally ERP9:
1. Receipt voucher
2. countra voucher
3. payment voucher
4. journal voucher
5. purchase voucher
6. sales voucher
7. memo voucher
8. stock journal
9. physical stock
• Recording Transactions
Accounting vouchers in tally.ERP9
1. Contra voucher:-contra voucher is used for funds transfer between cash and bank
account.
Path:- gateway of tally → accounting voucher → f4:contra
Entry:-
Obc bank a/c Cr.
cash Dr.
2. Payment voucher:-All payments are recorded in payment voucher. Such paymaent may
be towards purchase expenses, deus to creditors, loan and advances given by you or
repayment of loan given by you etc.
Go to gateway of tally → accounting vouchers → F5:Payment
Entry:-
Jyoti Dr.
Cash Cr.

3. Receipt voucher:-All inflow of money is recorded through receipt voucher. such

receiptmay be towards any income from debtor loans taken or refund of loan given
earlier etc.
Go to gateway of tally → accounting voucher → F6:receipt
Entry:-
Cash Cr.
Satinder Dr.
4. Journal voucher:-journal is an adjustment voucher normally used for non cash
transaction like adjustment between ledger account.
Go to gateway of tally → accounting voucher → F7: journal
Entry:-
Deprecation Dr.
Furniture Cr.

5. Sales voucher:-All sale transactions are entered in sales voucher. cash sale entry in sale
voucher would automatically appear in both books like in sale register and sale book.
Go to gateway of tally → accounting voucher → F8: sales
Entry:-
Cash Dr.
Sale Cr.

6. Purchase voucher:- all purchase transactions including including cash purchase is

entered in purchase voucher. press F9 function key at voucher screen to enter 9
purchase vouchers.
Go to gateway of tally → accounting voucher → F9: purchase
Purchase Dr.
Cash Cr.

7. Credit note voucher:-Cerdit note is issue when a coustomer returns some goods or
when you grant him credit due to rate of difference in discount.
Go to gateway of tally → accounting voucher → ctrl.+F8: credit note
Cash Cr.
Sales return Dr.

8. Debit note voucher entry:-Debit note voucher is entered to debit party account
normally debit note is issuedwhen bought goods or return to vendor or when you
charged or extra rate difference.
Go to gateway of tally → accounting voucher → ctrl.+F9: debit note
Cash Dr.
Purchase return Cr.
THANKS