Getting started with income tax | Tally Chennai | Tally Intergation | Tally Support |

Download Getting started with income tax | Tally Chennai |  Tally Intergation | Tally Support |

Post on 19-May-2015

4.252 views

Category:

Business

0 download

Embed Size (px)

DESCRIPTION

For more information about this PDF file. Please visit http://www.tallyspot.comIdeal spot for a obtain Tally 9 ERP and download free Tally.ERP 9 versions. Up-grade Tally Accounting Software & .NET Subscription, Advanced Web Interface Accounting Software for Asia & Most ERP Software Products. Import data from tally & Data Connectivity to Tally.ERP 9 Import.

TRANSCRIPT

<ul><li> 1. Getting Started with Income Tax</li></ul><p> 2. The information contained in this document is current as of the date of publication and subject to change. Because Tally must respondto changing market conditions, it should not be interpreted to be a commitment on the part of Tally, and Tally cannot guarantee theaccuracy of any information presented after the date of publication. The information provided herein is general, not according toindividual circumstances, and is not intended to substitute for informed professional advice.This document is for informational purposes only. TALLY MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THISDOCUMENT AND SHALL NOT BE LIABLE FOR LOSS OR DAMAGE OF WHATEVER NATURE, ARISING OUT OF, OR INCONNECTION WITH THE USE OF OR INABILITY TO USE THE CONTENT OF THIS PUBLICATION, AND/OR ANYCONDUCT UNDERTAKEN BY PLACING RELIANCE ON THE CONTENTS OF THIS PUBLICATION.Complying with all applicable copyright and other intellectual property laws is the responsibility of the user. All rights includingcopyrights, rights of translation, etc., are vested exclusively with TALLY SOLUTIONS PRIVATE LIMITED. No part of this documentmay be reproduced, translated, revised, stored in, or introduced into a retrieval system, or transmitted in any form, by any means(electronic, mechanical, photocopying, recording, or otherwise), or for any purpose, without the express written permission of TallySolutions Pvt. Ltd.Tally may have patents, patent applications, trademarks, copyrights, or other intellectual property rights covering subject matter in thisdocument. Except as expressly provided in any written licence agreement from Tally, the furnishing of this document does not give youany licence to these patents, trademarks, copyrights, or other intellectual property. 2011 Tally Solutions Pvt. Ltd. All rights reserved.Tally, Tally 9, Tally9, Tally.ERP, Tally.ERP 9, Shoper, Shoper 9, Shoper POS, Shoper HO, Shoper 9 POS, Shoper 9 HO,TallyDeveloper, Tally Developer, Tally.Developer 9, Tally.NET, Tally Development Environment, Tally Extender, Tally Integrator,Tally Integrated Network, Tally Service Partner, TallyAcademy &amp; Power of Simplicity are either registered trademarks or trademarks ofTally Solutions Pvt. Ltd. in India and/or other countries. All other trademarks are properties of their respective owners.Version: Getting Started with Income Tax/Tally.ERP 9 Series A Release 3.2/September 2011 3. ContentsIntroduction ................................................................................................................................... 1Lesson 1: Configuring Income Tax ............................................................................................. 5Lesson 2: Income Tax Master Configuration 2.1 Pay Head Configuration .................................................................................................................... 7 2.2 Employees Income Tax Declarations ............................................................................................ 12 2.2.1 Rent Declaration for House Rent Allowance ........................................................................................... 13 2.2.2 Declaration of Investments U/s 80C &amp; 80CCF ....................................................................................... 16 2.2.3 Other Deductions (U/s 80D, 80DD, 80E etc.) ......................................................................................... 21 2.3 Override Income Tax ...................................................................................................................... 23 2.4 Tax Configuration ........................................................................................................................... 23 2.5 Previous Employer Details ............................................................................................................. 27 2.6 Pay Head Creation for Income Tax Deduction ............................................................................... 27 2.6.1 Creating Income Tax Pay Head .............................................................................................................. 28 2.6.2 Create/Alter Salary Details ..................................................................................................................... 29Lesson 3: Processing Payroll 3.1 Recording Attendance ..................................................................................................................... 31 3.2 Processing Payroll Vouchers .......................................................................................................... 36 3.2.1 Processing User Defined Pay Heads ....................................................................................................... 37 3.2.2 Processing Salary with Income Tax Deduction ...................................................................................... 39 3.2.3 Processing Payments ............................................................................................................................... 40Lesson 4: Income Tax Reports 4.1 Computation Report ........................................................................................................................ 46 4.1.1 Salary Projection ..................................................................................................................................... 52 4.2 Challan Reconciliation .................................................................................................................... 53 4.3 Returns ............................................................................................................................................ 55 4.3.1Form 24Q................................................................................................................................................. 55 4.3.2Annexure I to 24Q .................................................................................................................................... 57 4.3.3Annexure II to 24Q .................................................................................................................................. 59 4.3.4Form 16 ................................................................................................................................................... 63 4.3.5Form 12BA ............................................................................................................................................... 65 4.3.6ITR-1 ........................................................................................................................................................ 66 4.4 E-Return .......................................................................................................................................... 70 4.4.1 E-24Q ....................................................................................................................................................... 70 4.4.2 Print Form 27A ........................................................................................................................................ 73 4.5 Exception Reports ........................................................................................................................... 75 4.5.1 PAN Not Available ................................................................................................................................... 75 4.5.2 Other Records .......................................................................................................................................... 77 4.5.3 TDS Variance ........................................................................................................................................... 78i 4. IntroductionIncome Tax refers to the tax that is levied on the personal or business income as per the IncomeTax Act, 1961. The Tax which is levied on the Business Income for a firm or a corporate is referredas Corporate Tax and will not be dealt in this book. This book covers the personal income which isreceived as salary or professional fees. In particular, this book deals with the Income that origi-nates from Salaries. To understand the Income Tax Act, it is important for you to understand thebasic terms used in the Act which are described one by one.Assessment YearAs per section 2(9) of Income Tax Act, 1961, the Assessment Year means the period of twelvemonths commencing on the 1st day of April every year and ending on 31st March of the next year.e.g. for 2010-11, the assessment year will be from 1st April 2010 to 31st March 2011 for theFinancial Year 2009-2010.Previous YearPrevious year refers to the Financial Year immediately preceding to the Assessment Year. e.g. for2010-2011, the Previous year will be from 1st April 2009 to 31st March 2010.AssesseeAs per Income Tax Act 1961 (Act no. 43), an assessee is a person by whom any tax or any othersum of money is payable under this Act, which includes: every person in respect of whom any proceeding under this Act has been taken for theassessment of his income 25[or assessment of fringe benefits] or of the income of anyother person in respect of which he is assessable, or of the loss sustained by him or bysuch other person, or of the amount of refund due to him or to such other person every person who is deemed to be an assessee under any provision of this Act every person who is deemed to be an assessee in default under any provision of this ActPersonAs per Income Tax Act, the person includes: an individual a Hindu Undivided family a Company or organisation a firm1 5. Introduction anassociation of persons or a body of individuals a local authorityTotal Incomei. Total Income for ResidentAs per the provisions of Income Tax Act, the total income of any previous year of a person who isan Indian resident includes all income from whatever source derived which: is received or is deemed to be received in India in such year by or on behalf of such person accrues or arises or is deemed to accrue or arise to him in India during such year accrues or arises to him outside India during such yearProvided that, in the case of a person not ordinarily resident in India within the meaning of sub-section (6) of section 6, the income which accrues or arises to him outside India shall not be soincluded unless it is derived from a business controlled in or a profession set up in India.ii. For Non Resident IndianAs per the provisions of Income Tax Act, the total income of any previous year of a person who isa non-resident includes all income from whatever source derived which: is received or is deemed to be received in India in such year by or on behalf of such person accrues or arises or is deemed to accrue or arise to him in India during such year.Gross Total IncomeTotal income computed in accordance with the provision of the Income Tax Act before making anydeduction under Chapter VIA. Gross Total Income or Gross Salary includes the following: Salary as per provisions contained in Section 17(1): Includes all earning pay com-ponents. Value of Perquisites u/s 17(2) (as per Form 12BA): Includes all perquisites (Non-Monetary Benefits) values paid to the employees. Profits in lieu of Salary u/s 17(3) (as per Form 12BA): Includes Any compensationpaid to the employees in connection with termination, modification of terms of employ-ment, amount paid prior to employment etc.Allowances exempted U/s 10Following are the allowances which are exempted U/s 10 of Income Tax from the Gross Salary forthe Computation of Income Tax: Allowance provided to the Employees working in transport system Border Remote area allowance Children education allowance (for a maximum of two children) Children Hostel Expenditure Allowance (for a maximum of two children) Conveyance Allowance Counter Insurgency Allowance - provided to the members of armed forces operating inareas away from their permanent locations Field Area Allowance - Compensatory field area allowance provided in various areas ofArunachal Pradesh, Manipur, Nagaland, Sikkim, HP, UP and J&amp;K. 2 6. Introduction Gratuity - paid at the time of retirement High Altitude Allowance Highly Active Field Area Allowance House Rent Allowance Island Duty Allowance Leave Encashment on Retirement Leave Travel Allowance Medical Reimbursement Mining/Underground Allowance Modified Field Area Allowance Retrenchment Compensation - A Compensation given to workers at the time of closingdown of Undertaking or transfer Tribal Scheduled Area Allowance Voluntary Retirement Allowance For more information on eligibility criteria for each allowance type you can refer to the Income Tax web site as these keeps changing from time to time.Deductions U/s 16Following are allowed as deductions from the Gross Salary for the computation of Taxable incomeU/s 16 of Income Tax Act: Entertainment Allowance - Entertainment allowance specially granted to an employee who is in receipt of Salary from Government. Professional Tax - Tax on EmploymentOther Income Declared by EmployeeThe Other Income Declared by the Employee Income from House Property, Other sources ifany is added to the Gross Income for the computation of Taxable salary.Deductions Under Chapter VI-AFollowing are additional deductions allowed as deductions from the remaining salary for the com-putation of Taxable Income: Investments U/s 80C, 80CCF - all the investments such as Insurance, Mutual funds, House loan principal amount etc. are considered as eligible investment for the computation of Taxable income. Other expenses U/s 80D, 80DD, 80E etc.- Other expenses such as Mediclaim, Dona- tions, payment of interest on loan for higher education etc. are allowed as other deductions for the computation of Taxable Income. 3 7. IntroductionRelief U/s 89,90,91The special reliefs granted to some employees due to the dual taxation system are also allowedas Relief U/s 89,90 and 91 and is reduced from the Taxable Income based on the type ofagreement with the other country.Taxable IncomeThe Net Income which is arrived after considering all eligible exemptions, investments and deduc-tions is known as Taxable Income. The Income Tax is computed on the Net Taxable Income foreach employee.4 8. Lesson 1: Configuring Income TaxIncome Tax Configuration is a simple and one time process in Tally.ERP 9.To configure Income Tax,Go to Gateway of Tally &gt; F11: Features &gt; F3: Statutory &amp; Taxation The Payroll and Payroll Statutory features should be enabled in Tally.ERP 9, before configuring the Income Tax. Set the option Set/Alter Payroll Statutory Details to Yes Under Income Tax section, Specify your Companys TAN in the Tax Assessment Number field Specify the Income Tax ward details in the Income Tax Circle/Ward field Select the required Deductor Type based on the type of organisation from the List ofCompany Type Specify the name of person who is responsible for deducting Income Tax...</p>