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Lower Deduction of TDS in Tally | How to manage

TDS is in tally.erp 9 is the biggest helping hand for me as it help me to avoid manual work relating to TDS compliance. Since entire system in tally.erp 9 relating to TDS is automated all you need is to make some one time set up for enable TDS in tally.erp 9 and then just concentrate your attention only towards making entries. Your tally.erp 9 will take care of TDS calculation, TDS return, Form no. 16a and every aspect relating to TDS including automated payment challan for TDS. If you are not aware of TDS features in tally then you should referTDS help file for further reference

One more interesting feature available in tally.erp 9 is to manage lower deduction TDS rates for certain suppliers

By virtue of Section 197/197A an assesses can get  a certificate of lower deduction from the ITO.

Such certificate will include your TAN number, Assesses PAN Number, Period of applicability, approx. billing amount to you during the period and the % of TDS by which you should deduct TDS on the same.

Let’s assume one of your supplier presents you such a certificate of lower deduction of tds at a rate of 6%, then you must deduct the same as per the certificate produced to you.

Let’s learn how to manage the same in tally.erp 9. Once you make the settings as per below then whenever you book the invoice of such supplier then TDS will be calculated and deducted from the bill automatically at the rates specified as per the lower Deduction certificate

Go to related supplier’s ledger who produced you the lower deduction certification

Set yes to Is tds applicable  ?

Then set advance entries in tds through F12 configuration

select deductee type from the list

use advanced tds entries set to yes

You will find a pop up as per below

then go to alter Zero/lowder deduction to yes

you will find below screen

here select the Nature of payment applicable from the pop up window list

set section number (it will be shown in the lower deduction certificate

mention necessary details

If you have any query, then please post it on support forum only.


  1. Dear Sir,

    I am invoicing in USD. I am facing a peculiar problem in Tally. When I invoice in USD on a given date the foreign exchange rate is say INR 45.00 for each USD. I receive the amount from by customer after the credit period then the exchange rate would be say INR45.50 for each USD.
    Hence as per me when I invoice the value of the invoice in USD and INR would be reflected and when I receive the amount and bank receipt entry is passed the difference gain or loss in foreign exchange should be reflected.

    But it is not happening, when I invoice there is a exchange gain or loss being displayed considering the last exchange rate taken for invoicing.

    What is the exact nature of the problem ? How can it be resolved ?

    Thanks & regards,
    Venkatesh R

    1. Dear Venktesh,
      You need to enable multi currency.
      Have to set up multi currency, create USD currency. read my articles under category of multi currency. There is everything to solve your problem

      1. Sir,
        What you say is ok but does it solve the problem of difference in foreign exchange rates during the first time when i invoice to the customer

        Thanks & regards,

        1. Venktesh,
          Better if you can send me the screen shot of your problem or what you exactly want, then definately, I can help you

  2. Syed

    Hi Mahendra,

    I am facing a problem in Tally regarding TDS deduction. Earlier I had set “Deduct TDS in same voucher” to yes, but now for some ledgers I want to deduct TDS separately. When I want to set it to “NO’, it is not happening. The option to deduct TDS or not during voucher entry is also getting skipped, so I cant make a choice even during voucher entry. Please provide some solution.

  3. rohini

    dear sir
    how will you enable the following option?
    – vat in tally
    – payroll
    – budgets & controls
    – current assets
    – cr/dr instead of to/by

    thank you sir

  4. SUNIL

    Thank you sir

    the TDS was briefly explained you and i am learned TDS from you and iam implimented TDS in tally i got it sir

    1. Sunil,
      Glad to see your feedback and the post help you to understand implementation of TDS in Tally.erp.

  5. plz i am new teacher in erp9 plz advice how to enter tds transaction in tally.erp9 with example

  6. Pavan

    plz give me tds exp. for tds deducted on salary and contrater with all extry in tally erp. plz explain me all thing.

    1. Pavan,
      I had asked your Tally serial number, still instead of responding, you are raising your query again.
      Plz note that without mentioning your Tally.erp 9 serial number, you won’t be able to get support/response from us.

  7. bala

    when i enter payment voucher usd but i need to convert euro or other currency how to do

  8. bikash

    when i enter payment voucher usd but i need to convert euro or other currency how to do?

  9. satish

    how to enter vat in tally erp9

  10. prasithck

    How to enter Tds entries in tally

  11. prasithck

    how to enter tds in tally

  12. ASHISH

    You have correctly elaborated the tool for lower tds but in tally ERP 9, the limit of amount on which lower TDS applicable can not be set so that the transaction exceeding limit could be deducted on normal TDS rate. Please suggest.

    Ashish Mehta

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