TCS Entry TallyPrime 6.0: Sales of Goods 2026

The deadline for remitting TCS collected in July is August 31st, 2026. Many CAs face challenges ensuring accurate TCS is applied and recorded on sales vouchers in TallyPrime 6.0. This article guides you through the precise steps to configure and post TCS entries for sales of goods as per Section 206C of the Income Tax Act. By the end, you will confidently record TCS transactions in TallyPrime 6.0.

What is TCS on Sale of Goods?

TCS stands for Tax Collected at Source. Under Section 206C of the Income Tax Act, 1961, sellers must collect a percentage of the sale price from buyers for specific goods. Think of it as an advance tax payment collected by the seller on behalf of the government. This ensures tax compliance from the point of sale for specified high-value transactions. For 2026, the rates vary based on the goods sold.

How to Configure and Record TCS on Sales in TallyPrime 6.0 — Step by Step

1. Create TCS Ledger: Go to Gateway of Tally > Create > Ledger. Name it 'TCS on Scrap Sales' or similar. Under 'Duties & Taxes', select 'GST' or 'Income Tax'. For TCS, choose 'Tax Collected at Source' as the Nature of Duty/Tax. Under GST details, set Type of Supply to 'Goods'. Tally tip: If you don't see 'Tax Collected at Source', ensure your TallyPrime 6.0 is updated.
2. Configure TCS Rate: In the TCS Ledger creation screen, set the 'Applicable from' date to 2026-04-01. Enter the TCS rate (e.g., 1% for scrap sales). Specify 'On collection of Tax' as the Calculation type. Set 'Rounding Method' to 'Normal Rounding' or as per your requirement. Incorrect rates will lead to under-collection.
3. Set Up GST Ledger: Ensure your GST ledger (e.g., 'GST Output CGST' or 'GST Output SGST') is correctly configured under 'Duties & Taxes' with the appropriate tax type.
4. Create Sales Voucher Type: Go to Gateway of Tally > Create > Voucher Type. Copy an existing Sales voucher type. In the Voucher Type screen, set 'Use Advance Tax' to 'Yes'. This enables TCS functionality within the sales voucher. Tally tip: This option is crucial for automatic TCS calculation.
5. Record Sales Transaction: Go to Gateway of Tally > Vouchers. Select your newly created Sales voucher type. Enter the buyer's details, item details, quantity, and rate. After entering item details, TallyPrime 6.0 will automatically prompt for TCS details if applicable. You will see the TCS amount calculated based on the ledger configuration. If TCS is not appearing, verify the item's HSN/SAC code and the ledger configuration.

Mistakes That Cost Indian CAs Hours

• Mistake: Not enabling 'Use Advance Tax' in the Sales Voucher Type. → What breaks: TCS will not be automatically calculated or prompted for. → Fix: Go to Gateway of Tally > Create > Voucher Type, select your Sales voucher, and set 'Use Advance Tax' to 'Yes'.
• Mistake: Incorrectly configuring the TCS ledger under 'GST' instead of 'Income Tax'. → What breaks: TCS will be treated as GST, leading to incorrect tax reporting and reconciliation. → Fix: Ensure TCS ledgers are created under 'Duties & Taxes' and select 'Tax Collected at Source' as the Nature of Duty/Tax.
• Mistake: Forgetting to update the TCS rate for the specific financial year. → What breaks: Incorrect TCS amounts are collected, leading to non-compliance. → Fix: Review and update TCS rates in your TCS ledgers annually or as per statutory changes.
• Mistake: Applying TCS to all sales transactions instead of only specified goods. → What breaks: Over-collection of tax from customers and incorrect reporting. → Fix: Ensure TCS is applied only to ledgers associated with goods listed under Section 206C. Use item-level TCS configuration if needed.

Pro Tips for 2026

Verify every TCS collection against the buyer's PAN before you file. A PAN mismatch is what later surfaces as a demand notice, and it costs minutes to catch at entry against hours to unwind afterwards. Keep the TCS ledger's 'Applicable from' date aligned to the financial year, so a mid-year rate change does not apply itself retrospectively to vouchers you already passed.