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Tax Master

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Create a Tax Head for each Tax accounts and link the Tax head with Ledger Account to which the Tax amount would be posted.

Fields in the Tax Master:

Fields in the Tax Master are as follows:

Tax Name

Select the Tax Head Name (e.g VAT)

Included in Rate

Set Yes, if the Tax is included in the price. In that case, tax would be automatically computed internally and posted to the ledger. For example if Output Vat 10% is included in price, for a sale value of Rs.100 including VAT, the VT would be computed as 100/11 = 9.09 & Sale Value would be calculated as Rs.90.91 and accordingly the values would be posted to the respective ledger accounts.

Set No if the Tax is to be separately charged.

Calculation Method

Tax can be charged both on actual item rate or discounted item rate. Set "Quantity * Rate" to charge tax on actual rate, set "Default" to charge tax on discounted rate.

Default

Sub Total = Rate, Item Discount = Rate * Disc %,  Tax Total = (Sub Total – Item Discount) * Tax %.

 

Sub Total = Rate – Tax Total, Item Discount = Rate * Disc %,  Tax Total = (Sub Total – Item Discount) * Tax %.

Quantity * Rate

Sub Total = Rate, Item Discount = Rate * Disc%,  Tax Total = Rate * Tax%.

 

Sub Total = Rate - Tax, Item Discount = Subtotal * Disc%,  Tax Total = Rate - (Rate*100/110.30).

 

Next, enter the Tax name and breakup of the Tax. For example, if Service Tax is 12.36% and it has 3 components for accounting, Service Tax 12%, Education Surcharge @ 2% on Service Tax & Higher Education tax @ 1% on service Tax, the total service Tax would be 12.36% (12% + 2% of12% + 1% of 12%).

In that case, you will enter following names & rates under Service Tax head

Service Tax                        - 12.00%
Education Cess                        - 00.24%
Higher Education Cess                - 00.12%
Total-                                  12.36%

 

EXAMPLE:

Tax Name

Service Tax 12.36%

Included in Rate

Select YES if the Tax is included in Item Rate (no tax will be further added but the tax amount will be back computed and posted to the Tax Ledger). Set No if the Item Rate is exclusive of Tax (Tax  will be added extra and posted to the ledger account)

 

Component Tax Ledgers:

Srl

Account

Tax %

1.

Service Tax 12% (Ledger / Account Head under Duties & Tax Group) – Select account from list of account or press CTRL + N and create new.

12.00%

2.

Surcharge 10% on Service Tax (Ledger / Account Head under Duties & Tax Group) – Select account from list of account or press CTRL + N and create new.

00.12%

3.

Education Cess 20% on Service Tax (Ledger / Account Head under Duties & Tax Group) – Select account from list of account or press CTRL + N and create new.

00.24%

In the above example, 3 different ledger heads are defined and tax 12.36 will be split and posted in respective 3 different ledger accounts. To post to a single ledger instead of 3 ledgers, set as follows:

Srl

Account

Tax %

1.

Service Tax 12.36 % (Ledger / Account Head under Duties & Tax Group) – Select account from list of account or press CTRL + N and create new.

12.36%

Buttons in the Tax Master:

Buttons in the Tax Master are as follows:

^L Location:

Press CTRL + N to set Location wise Tax.

For more detail please visit:

Is it possible to create different Tax for same product in different branches?

Tax Master Display Screen:

Tax Master Display Screen is as follows:

Related Faqs: