How to Create DA Earning Pay Heads in Tally Prime?
Step: GOT > Create > Pay Heads > Enter
Ø After reaching by follow above step, fill all details to create DA Pay Heads like,
· Name–Enter the name of Earning Pay Heads. like I Enter “Dearness Allowance”
· Pay head type – In this section different type of Pay heads are listed. Select “Earnings for Employees” from list to create Earning Pay heads.
· Income type – These are two type of Income gain by employee first fixed and second Variable.
§ Fixed – If your employee’s DA is fixed in every month then use this income type. Like DA of employee is fixed for a particular period.
§ Variable – If your employee’s DA is vary or changes in every month then use this income type
v I select “Fixed” from both of them income type because DA is fix.
· Under – Select Indirect Expense because DA is indirect expense for Employer.
· Affect Net Salary – Set to this option “Yes” because DA Affect net Salary.
· Name to be displayed in payslip – Type name “DA” to print in Pay slip
· Use for Calculation of Gratuity – Set to this option “Yes” because Gratuity calculated on
the basis of (Basic Salary + Dearness allowance).
Ø Set/Alter Income tax details – Set to this option “Yes” for income tax deduction from employee’s DA
Ø After income tax details set to “Yes” a new window appear in front of you.
Ø In this window select the appropriate option like,
§ Income tax Component – Select the required tax component for your Pay
heads like I select “Dearness Allowance (Considered for Retirement Benefits)” for DA form list.
§ Tax Calculation Basis – in this section two option are available
o On Projected Value – If DA of employee will not change according to months or Year then select this option.
o On Actual Value – If DA of Employee will change according to months or year then select this option.
Ø I select “On Projected value”
§ Deduct TDS across periods – Set to this option “Yes” because DA is taxable.
Ø
Fill details in Income tax details like following screenshot:
· Calculation Type – Select “As Computed Value” from list for DA because it is calculated Percentage on Basic Salary value in One Months.
· Calculation Period –select “Months”. Because DA Paid according to Month wise as a flat value.
· Rounding Method – Select any rounding method to round off Decimal portion of DA
amount. Like I select “Normal Rounding”.
· Limit – Type Limit amount of rounding to round off according to limit. Like I type “1”.
· Compute – Select “On Specified Formula” Because we Calculate DA Percentage basis on Basic Salary.
Ø
After Selecting “On Specified formula” a new screen appear like that screenshot:
§ Add Pay Head – Select Basic Salary to calculate DA value on basis of percentage of basic salary.
· Effective from – Type Date from which you apply DA rate for employee in Tally prime.
Like I type “1/Jan/2021”.
· Slab Type – Select Percentage to Calculate DA
· Value – Type Value of Percentage to calculate DA amount. Like I type “10%”.
Ø
Fill all Above details in Pay heads screen to create DA Earning Pay heads like following screenshot:
Ø Press Enter or Ctrl+A to save this screen.
a) House Rent Allowance (HRA) Earning Pay Heads
