Account type: Tax
Marks VAT, TDS and fee accounts so tax templates can post to them and tax reports pick them up.
In detail
Account type Tax marks a ledger as one that holds tax collected, recovered or withheld, so that tax templates may post to it and the tax reports know where to look. In the demo chart four ledgers carry the type: 2261 - VAT Payable - YFF and TDS Payable - YFF under Duties and Taxes, and 1241 - VAT Receivable - YFF and TDS Receivable - YFF under Indirect Tax Assets. A template row pointing at an account without this type is refused on save. VAT Payable grows with every sales invoice and falls with each IRD remittance; in the demo it ends at Rs 4,160 after collecting Rs 8,320 and paying Rs 4,160.
Formula
VAT Payable balance = VAT on sales invoices - VAT on credit notes - payments to IRD; Rs 8,320 - Rs 4,160 = Rs 4,160
Accounting entry
| Account | Debit | Credit |
|---|---|---|
| 2261 - VAT Payable - YFF | Rs 4,160 | |
| Bank Account - YFF | Rs 4,160 |
How to record it in BRAccount
- 01Go to Accounts Setup > Chart of Accounts and expand Liabilities > Current Liabilities > Duties and Taxes.
- 02Open 2261 - VAT Payable - YFF and confirm Account Type is Tax.
- 03Each submitted Sales Invoice credits it through the template row; each IRD payment debits it.
- 04Click View Ledger to see the Rs 8,320 collected and the Rs 4,160 remitted.
- 05To remit, go to Invoicing > Journal Entry > New: Dr VAT Payable, Cr Bank, and submit.
- 06Compare the closing balance with the VAT return before filing.
When to use it
Set on VAT Payable, input VAT, TDS Payable and fee payable accounts.
Example from the demo books
VAT Payable - YFF, type Tax, holds the Rs 4,160 from ACC-SINV-2026-00004.