Payroll & Income Tax with Tally Prime/ERP9 – Capital Varsity's 2025 Guide
Managing payroll and income tax is one of the most crucial tasks for any business, whether small or large. With evolving tax laws and the need for accurate employee compensation, businesses require a powerful and user-friendly tool. Tally Prime and Tally ERP9 have proven to be two of the most efficient accounting software platforms in India. At Capital Varsity, we ensure that students and business professionals are thoroughly trained in the application of these tools to manage payroll and income tax seamlessly.
What is Payroll?
Payroll refers to the process of compensating employees for their work, including the calculation of salaries, wages, bonuses, deductions, taxes, and other benefits. It also includes the preparation of payslips, compliance with statutory laws, and the filing of income tax reports.
Why Payroll Management Matters
- Ensures employee satisfaction through accurate and timely payments.
- Maintains compliance with labor laws and tax regulations.
- Streamlines operations and reduces the risk of errors.
- Helps management make informed financial decisions
What is Income Tax?
Income tax is a direct tax that businesses and individuals must pay to the government based on their income or profits. In payroll processing, income tax is deducted at source (TDS) from the employee’s salary and deposited with the government.
Payroll & Income Tax Features in Tally ERP9 and Tally Prime
Both versions offer end-to-end payroll and taxation management features:
1. Employee Master Setup
- Create and maintain employee records.
- Define categories and groups for easy classification.
- Configure statutory details (PAN, Aadhar, PF, ESI, etc.).
2. Salary Structure Management
- Design salary components (Basic, HRA, DA, Bonus, Incentives, etc.).
- Configure pay heads for earnings and deductions.
- Set up attendance types like leaves, holidays, overtime.
3. Payroll Processing
- Automatic calculation of gross and net salary.
- Manage pay periods (weekly, monthly, etc.).
- Generate salary sheets and payslips.
4. Statutory Compliance
- TDS computation and deduction.
- Provident Fund (PF) and Employees State Insurance (ESI) deductions.
- Professional tax, gratuity, and other applicable deductions.
5. Reports & Filing
- Monthly and annual tax computation reports.
- E-Filing of TDS returns (Form 24Q, 26Q).
- Generation of Form 16 and Form 12BA.
Tally Prime vs. Tally ERP9 for Payroll
Feature | Tally ERP9 | Tally Prime |
UI/UX Design | Traditional | Modern and intuitive |
Navigation | Menu-driven | Flow-based navigation |
Payroll Setup | Manual | Simplified, guided process |
Reporting | Standard | Enhanced visuals, filters |
E-filing Capabilities | Basic | Seamless and advanced |
Why Learn Payroll & Taxation with Tally at Capital Varsity
Capital Varsity offers a well-structured course focused on payroll and income tax management using Tally. Our curriculum is designed to align with current industry requirements and compliance mandates of the Government of India.
Course Highlights:
- Hands-on training with Tally Prime and ERP9.
- Real-world payroll simulations.
- Step-by-step TDS and income tax return filing.
- Free updates on tax laws and statutory changes.
- Assignments, mock tests, and placement assistance.
Career Benefits
By mastering payroll and tax processing with Tally, you can:
- Become eligible for roles like Payroll Executive, HR Officer, Tax Accountant, etc.
- Work in CA firms, corporate offices, consultancies, and startups.
- Offer freelance services to SMEs and individual professionals.
Step-by-Step Payroll Processing in Tally
- Enable Payroll: From the features menu, enable payroll and statutory settings.
- Create Employee Groups: E.g., Managerial, Technical, etc.
- Create Employees: Add their personal, professional, and statutory details.
- Set Salary Details: Add earnings, deductions, and computation rules.
- Attendance Records: Track leaves, holidays, and attendance using vouchers.
- Process Salary: Use payroll vouchers to generate payslips.
- TDS Deduction: Create TDS nature of payment and deduct from salary.
- Generate Reports: Payslips, salary registers, compliance reports.
Compliance Checklist
- PAN and TAN registration
- TDS return filing (quarterly)
- Deposit PF and ESI dues on time
- Issue Form 16 to employees
- Maintain digital payroll records
Final Thoughts
Efficient payroll and income tax management is a non-negotiable need for every modern business. Learning how to operate Tally ERP9 and Tally Prime for these tasks not only enhances your professional profile but also gives you a competitive edge in the job market.
Join Capital Varsity to upskill with practical knowledge and certifications in Payroll and Income Tax using Tally software. With expert guidance and real-time simulations, you’ll gain the confidence to handle accounting responsibilities in any organization.
To learn more or enroll, visit: www.india.capitalvarsity.com