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Tally Prime Note
Basic Note
- Basic Fundamental
- GST & Types of Firms under GST
- Basic AccounƟng Terms
- Accounts & Its Terminology
- Vouchers in Tally
- Ledgers in Tally
- Groups in Tally
- Download & Install Tally Prime
- IntroducƟon of Gateway of Tally
- Basic of Purchase Entry
- Basic of Sales Entry
- Debit Note & Credit Note
- Receipt, Payment & Contra
- Tally Important Shortcut Keys
Chapter 1 : Basic Fundamental
What is Tally (TransacƟons Allowed in a Linear Line Yards)? Tally is a financial accounƟng soŌware package. It is a complete business accounƟng and inventory management soŌware that provides various faciliƟes like Government supported formats, mulƟlingual operaƟons, processing for small and medium businesses in India. Latest version is Tally Prime 6.1. What is AccounƟng? AccounƟng is the language of business. AccounƟng is a systemaƟc process of idenƟfying, measuring, recording, classifying, summarizing, interpreƟng and communicaƟng financial informaƟon. Why learn AccounƟng?
- Maintaining systemaƟc record of transacƟons
- Ascertaining profit or loss
- Ascertaining financial posiƟon
- PrevenƟon of frauds What is Accountancy? The knowledge of how to make accounƟng is called accountancy. How to start learning Tally Prime? In Tally Prime, we create unlimited different companies which contain different company’s data. CreaƟng Company Company Name Company Address Company State Pin Code Mobile Number Financial Year GSTIN Number What is Financial Year? The Financial Year can be simply defined as a period of 12 months in which income is earned. Any revenue generated between April 1, 2025, to March 31, 2026, will be assessed for the current Financial Year (FY) 2025-26. What is Assessment Year? The Assessment Year is the 12 month-period that comes right aŌer the financial year. Assessment Year for any revenue produced between April 1, 2025, to March 31, 2026, would be 2026-27, during the financial year is taxed.
Types of GST RegistraƟon The Goods and Services Tax (GST) system offers two main schemes:
- ComposiƟon Firm: The ComposiƟon GST Scheme is designed for small businesses with limited turnover, generally up to ₹1.5 crore (₹75 lakh for some states). Under this scheme, businesses pay a fixed percentage of their turnover as GST (1% to 6% of total value of sell) and cannot collect GST from customers or claim Input Tax Credit (ITC). They only need to file quarterly returns(CMP08), making compliance easier. This scheme is ideal for small businesses like retailers, manufacturers, and service providers with minimal expenses and customers. So, B2C sales. Name of sales invoice: Bill of Supply
- Regular Firm: The Regular GST Scheme is for businesses with a turnover above ₹1.5 crore (₹75 lakh for some states). Under this scheme, businesses pay percentage of their turnover as per sold item as GST (like 5%, 12%, 18% or 28%) and businesses collect GST from customers and can claim Input Tax Credit (ITC) on their purchases, reducing their tax liability. Regular taxpayers must file monthly or quarterly GST returns, such as GSTR- 1 and GSTR-3B. This scheme allows the seamless flow of ITC across the supply chain, ensuring transparency and compliance. It is suitable for businesses that deal with taxable goods or services and have significant expenses, as ITC helps lower their overall tax burden. So, B2B Sales. However, it requires detailed record-keeping and regular tax filings. Name of sales invoice: GST Invoice, Tax Invoice, Invoice For example, Item sold for Rs. 1180 then method of voucher entry ComposiƟon Firm Regular Firm Item value - 1180 Item Value – 1000 SGST – 90 CGST – 90 Total Value – 1180 Choosing the right GST scheme depends on business size, turnover, and operaƟonal needs. Choosing the appropriate scheme is essenƟal for businesses, as it can impact their tax liability and compliance burden.
What is GSTIN? GSTIN (Goods & Services Tax IdenƟficaƟon Number) is a 15-digit unique idenƟfier assigned to every GST-registered taxpayer, including businesses, firms, dealers, and suppliers, under the GST in India. It is mandatory for businesses engaged in taxable supplies and is issued upon successful GST registraƟon, determined by their State, PAN, and EnƟty based details. Input and Output GST Input GST is the GST that a registered business pays on the purchase of goods or services used for business purposes. This tax is charged by the supplier and is reflected in the purchase invoice. The key advantage of Input GST is that it can be claimed as an Input Tax Credit (ITC). Output GST is the GST that a registered business collects from its customers when selling goods or services. The business is responsible for charging this tax on its sales, collecƟng it from customers, and subsequently remiƫng it to the
Chapter 3 : Basic AccounƟng Terms
What is Business TransacƟon? The term “Business TransacƟon” means a financial transacƟon or event entered into by the parƟes and recorded in the books of accounts. It is a financial event, which can be expressed in terms of money and brings change in the financial posiƟon of an enterprise. There are two types of TransacƟon
- Cash TransacƟon :- When the amount is transacted immediately on entering in to a transacƟon, it is a Cash TransacƟon.
- Credit TransacƟon :- When the amount is not transacted immediately and promise to pay later, it is a Credit TransacƟon. What is Capital? Capital is the amount invested by the proprietor or partner in the business. It may be in the form of money or assets having money value. It is a liability of the business towards the proprietor or partner. What is Drawing? It is the amount withdrawn or goods taken by the proprietor for his personal use. Goods so taken by the proprietor are valued at purchase cost. Drawings reduce the investment (or capital) of the owners. What is LiabiliƟes? LiabiliƟes mean the amount owed (payable) by the business to outsiders and to the proprietors. There are two types of liabiliƟes
- Current LiabiliƟes (Short term liabiliƟes) :- These are those liabiliƟes which are payable within a year. Example of current liabiliƟes are creditors, bills payable, short-term loans, etc.
- Non – Current LiabiliƟes (Long term liabiliƟes) :- Long term liabiliƟes are those liabiliƟes which are payable aŌer a longer period, (more than a year). Examples of long-term liabiliƟes are long term loans , debentures, equity shares etc. What is Assets? Assets are property or legal rights owned by an individual or business to which money value can be aƩached. In other words anything which will enable the firm to get cash or a benefit in the future, is an assets. Examples of assets are land , building , machinery , furniture , stock , debtors , cash and bank balances, etc.
There are two types of Assets
- Current assets : - Current assets are those assets which are retained in the business with the purpose to convert them into cash within a short period say, one year. For example, goods are purchased with a purpose to resale and earn profit.
- Non-Current assets (Fixed Assets) :- Fixed assets are those assets which are acquired not with the purpose to resale but to facilitate business operaƟons and increase the earning capacity of the business by employing them. For examples of fixed assets are land, building, machinery, computers, vehicles, furniture, etc. There are two types of Fixed Assets a. Tangible Assets :- Tangible assets are those assets which have physical existence, they can be seen and touched. Examples of tangible assets are land, building, machinery, computer, furniture, goods, etc. b. Intangible Assets :- intangible assets are those assets which do not have physical existence, they cannot be seen and touched. Examples of intangible assets are patents, goodwill, trademark, copyrights etc. What is Expense? It is the cost incurred for generaƟng revenue. For example wages, rent, Electricity bill. There are Four types of Expense
- Prepaid Expense :- It is an expense that has been paid in advance and the benefit of which will be available in the following year or years. For examples advance rent, advance school fee, etc.
- Outstanding Expense :- It is an expense that has not been paid but the benefit thereof has already been availed. For examples Electricity Bill, Water Bill, etc.
- Direct Expense :- Direct expenses are directly related to the producƟon of the product. For examples Wages, Factory rent, Cost of raw material, Fuel, etc.
- Indirect Expense :- Indirect expenses are not directly related to the producƟon of the product. For examples Salary, Telephone bills, PrinƟng, StaƟonery, etc. Debtor :- A person who owes amount to the enterprise on account of credit sales of goods or services is called a Debtor. Creditor :- A person to whom an enterprise owes amount on account of credit purchases of goods or services is called a Creditor. Journal Entry :- A Journal is the primary book of accounts in which transacƟons are first recorded in a chronological order, i.e., as they are entered into.
Chapter 5 : Vouchers in Tally
What is Voucher in Tally Prime? A voucher is a document that contains details of a financial transacƟon and is required for recording the same into the books of accounts. For every transacƟon, you can use the appropriate Tally voucher to enter the details and update the financial posiƟon of the company. The voucher entry menus opƟons are available under TransacƟons in the Gateway of Tally. Types of Voucher Contra Voucher F Payment Voucher F Receipt Voucher F Journal Voucher F Sales Voucher F Purchase Voucher F Credit note Voucher Alt+F Debit note Voucher Alt+F Reserve & Surplus F Memorandum Voucher Alt+F Types of Voucher in Tally Prime
- Contra Voucher:- Accounts which are related to Cash or Bank, when money is deposited or withdrawn from the bank, its entry is made on Contra Voucher. For example – Rs 50,000 deposited in the bank.
- Payment Voucher:- When payment is made to a person in Cash or by Cheque, then its entry is made in the Payment Voucher. For example – Rs 50,000 was paid to Ram.
- Receipt Voucher:- When someone receives money, commission, discount etc., then its entry is made in the Receipt Voucher. For example – Ram got a cash income of Rs 5000.
- Journal Voucher:- When it comes to loan, whether it is given or taken and provision etc., entries are made in the Journal Voucher. For example – Rahul purchased furniture worth Rs. 50,000 on credit from Ram.
- Sales Voucher:- All types of stock sales in cash and credit are accounted for on the Sales Voucher. For example – Shyam sold light worth Rs 10,000.
- Purchase Voucher:- All types of credit and cash purchases are entered in the Purchase Voucher. For example – Ram purchased goods worth Rs 50,000 on credit from Rahul.
- Credit Note Voucher:- When the sold goods are returned, an entry is made in the Credit Note Voucher. For example, goods worth Rs 2,000 were returned from Ram.
- Debit Note Voucher:- All types of purchase returns (return of purchased goods) are entered on the Debit Note Voucher. For example - Ram returned goods worth Rs.2,000 to Rahul. (Purchases Return)
- Reserve & Surplus:- The entries of funds created from all types of profits are made in Reserve & Surplus. 10.Memorandum Voucher:- If the entry is meant to be remembered, then the entry is made on the Memorandum Voucher.
Chapter 7 : Groups in Tally
What is Group in Tally Prime? In Tally, groups are some of the prime categories that are used to classify the ledger accounts. This helps to organize all the financial data systemaƟcally. It can help you to create a properly structured chart of accounts. AddiƟonally, it is essenƟal for analysis, reporƟng, and decision-making. Tally offers 28 predefined groups out of which 15 primary groups and 13 subgroups. What are the Primary Groups in Tally Prime? Groups Name DescripƟon Items that are included
- Capital Account The Capital Account group in Tally Prime is used to manage and track accounts related to owners’ equity and invested funds. It includes items reflecƟng ownership stakes, surplus funds, and organizaƟonal reserves, playing a key role in accounƟng structure. Capital funds. Reserves and Surplus.
- Loans (LiabiliƟes) The Loans and LiabiliƟes group in Tally Prime is used to record and manage accounts related to loans taken by the business. Classified under the liability secƟon of the balance sheet, it helps track outstanding balances and repayment of borrowed funds. Secured loans. Unsecured loans.
- Current LiabiliƟes Current Liability is used to track a business’s short-term obligaƟons or debts that must be seƩled within a year. It helps in idenƟfying and managing items related to immediate financial liabiliƟes. Sundry creditors. Short-term liabiliƟes. Outstanding expenses.
- Fixed Assets Fixed Asset group is used to manage accounts related to long-term tangible and intangible assets. These assets are acquired for long-term use in the business and are generally not intended for resale. Building. Machinery. Vehicles.
- Current Assets The Current Assets group is used to classify short-term assets expected to be converted into cash. These assets are essenƟal for supporƟng the day-to-day operaƟons and maintaining the business operaƟng cycle. Cash and cash equivalents. Accounts receivable. Inventories. Prepaid expenses.
- Investments The investment category is used to manage the financial investment made by the business. It helps to record all the primary groups. It includes making investments in mutual funds, bonds, shares, fixed deposits, and other types of financial instruments. Shares. Bonds. Mutual funds.
- Miscellaneous Expenses Miscellaneous expenses are minor costs that cannot be linked to specific acƟviƟes, to help manage regular operaƟonal costs effecƟvely. deferred revenue expenditures.
- Sales Accounts The Sales Account group is used to record income from the sale of goods and services. It is crucial for organizing revenue and plays a key role in the profit and loss account and financial analysis. Helps to record the income and sales of goods.
- Purchase Accounts The Purchase Account group is used to record and manage all expenses related to the purchase of goods and services. It is part of the Profit and Loss account, represenƟng direct procurement costs. It records the purchase of goods and services.
- Suspense Accounts The Suspense Account group is used to temporarily record transacƟons when the correct ledger account is uncertain. It acts as a placeholder unƟl the transacƟon details are clarified and properly reconciled. UnidenƟfied receipts. Unclassified Payments. Unreconciled bank entries. AccounƟng errors. Pending clarificaƟons
- Direct Incomes Direct expenses are costs directly related to the manufacturing or producƟon process, such as raw materials and wages. These expenses are essenƟal for procuring goods and bringing them to a saleable or finished state. Rent received. Commission. Interest Income.
- Indirect Incomes Indirect incomes are those types of income that are not directly related to your business but can help your business grow. These form the secondary sources of income but sƟll, it contributes to overall earnings. Interest income. Commission.
- Direct Expenses Direct expenses are those expenses that are directly related to the producƟon of goods and services that are related and relatable to the saleable state. All these expenses are directly aƩributable to manufacturing and procurement of goods. Raw materials. Wages.
- Indirect Expenses Indirect expenses are costs not directly linked to the producƟon of goods or services but are essenƟal for the overall funcƟoning of the business. They support business operaƟons without being part of the manufacturing or procurement process. Rent. Salaries. AdverƟsements.
- Provisions Provisions are used to record all the expenses and liabiliƟes that are incurred but not yet invoiced. In most of the cases, provisions are created for future reference. AnƟcipated such as taxes, salaries, and uƟliƟes. Provisions for depreciaƟon. LiabiliƟes for losses.
Chapter 8 : Download & Install Tally Prime
Download and Install Tally Prime Follow the below steps to install Tally Prime on Windows: Step 1: Visit the official website with the help of any web browser you like. Step 2: Now press the I buƩon on the keyboard or you can click on the Install buƩon to start the installaƟon process. Step 3: Now the setup is completed click on S BuƩon on Keyboard or click on the Start TallyPrime buƩon and the Tally will open automaƟcally. Step 4: Now click the A buƩon on Keyboard or click Accept buƩon. At this point, Tally Prime is successfully installed on the system and an icon is created on the desktop. Data Path ConfiguraƟon We will make two changes in the file of tally configuraƟon seƫngs, Specify locaƟon of Data files: ‘D:\Telly Prime\Data’ Default Companies=No How to Create Company in Tally Prime Step 1: Now for educaƟonal purpose we learn Tally Prime so click on T BuƩon on Keyboard or click on the ConƟnue in EducaƟon mode buƩon and the Tally will open automaƟcally in educaƟonal mode. Step 2: Select opƟon Create Company
Step 3: Now fill the basic details of the company. Step 4: AŌer complete above from then click Yes opƟon in accept. Then Company created successfully. AŌer that we go to GST opƟon then new window is open where we fill all the details of GST. Fill all details of GST. Then click Yes opƟon in accept.
Chapter 10 : Basis of Purchase Entry
Important point from Purchase Invoice
- Party name & Address Detail 8. Item GST Rate
- Party GSTIN Number 9. Item UQC Code
- Invoice Date 10. Taxable Value
- Invoice Number 11. SGST Value
- Item Name 12. CGST Value
- Item HSN Code 13. Round Off
- Item Qty 14. Total Invoice Value Types of Purchase
- Purchase Exempted
- Purchase Interstate Exempted
- Purchase GST
- Purchase IGST Types of Purchase Purchase From Item Tax Rate Purchase Exempted Self-State Nil Purchase Interstate Exempted Other State Nil Purchase GST Self-State 5%, 12%, 18%, 28% Purchase IGST Other State 5%, 12%, 18%, 28%
Chapter 11 : Basis of Sales Entry
Important point from Sale Invoice
- Party name & Address Detail 8. Item GST Rate
- Party GSTIN Number 9. Item UQC Code
- Invoice Date 10. Taxable Value
- Invoice Number 11. SGST Value
- Item Name 12. CGST Value
- Item HSN Code 13. Round Off
- Item Qty 14. Total Invoice Value Types of Sale
- Sales Exempted
- Sales Interstate Exempted
- Sales GST
- Sales IGST Types of Purchase Purchase From Item Tax Rate Sales Exempted Self-State Nil Sales Interstate Exempted Other State Nil Sales GST Self-State 5%, 12%, 18%, 28% Sales IGST Other State 5%, 12%, 18%, 28%
