How to add new vat class & vat rate ( 5%, 13.5% 14%) in tally 7.2,tally 8.1 &tally 9

Recently Some state govt has changed the existing tally rates. But the changed rates are not exist in tally by default , many are facing difficulty in preparing invoice, creating new ledgers or editing existing ledgers due to the absence of tax rates and rate class in older versions of tally . Older versions has no new vat calculation rate such as 5 % , 13.5 % 14 % etc. Here we are discussing the solution of this problem for those who are still using tally older versions.

How to add new vat rate and class in tally?

We are going add a new vat rate and class in Tally9 , say 5%.When you are adding a new Vat class, You must add both input vat class and and output vat class.

Adding input vat class

Download the Inputvat xml file from here ( if you are seeing this in a browser, copy all and save it in a notepad , and name ‘inputvat.xml’ )

Open the file with a note pad ( right click on xml file , from the context menu click on open with Notepad)

A notepad with following xml code will open

In the above xml file some tag marked in red color should be changed in accordance with your needs. Here the existing rate in xml file is 4 % this is changed to 5 %, and the state for vat is ‘Kerala’ if your state is Tamilnadu write tamilnadu there. And the final tag need to be changed is PERIODFROM tag, the date from which the new tax rate is applicable should be entered  in year month date format

For your convenience a table is given below ,  find out the left column tag from the notepad and replace with the right column content

FIND THIS TAG	REPLACE WITH THIS TAG
Input VAT @ 4%	Input VAT @ 5%
Purchases @ 4%	Purchases @ 5%
4	5
kerala	your state
20120401	start date

As you are adding 5% vat rate and class, you have to change existing rate 4 to 5 in the first four tags

Fifth tag is about your State , write your state name there

Sixth tag is about the effective date, the date format should be year month day for example the change is wef from 1^st april 2012 you should write 20120401.after editing the xml file will be like this.

Now save the file by clicking File > Save

Adding output vat rate

Now download output vat xml file . ( if you are seeing this in a browser, copy all and save it in a notepad , and name ‘outputvat.xml’ )In the same manner edit output vat xml file  and change the rate 4 % to 5%,State name and period from which the new rate is applicable . here is the tag need to be changed in output vat

FIND THIS TAG	REPLACE WITH THIS TAG
Output VAT @ 4%	Output VAT @ 5%
Sales @ 4%	Sales @ 5%
4	5
kerala	your state
20120401	start date

edit the file as described

Now save the file. The xml file for creating new vat class is ready with you. To apply this in tally software , you must import this xml files to tally.

How to import xml file in tally?

open Tally software

From gateway of tally Select

Import of data>>Masters

In the import file name field type the complete location of file stored in your computer, in my case it is

C:/Documents and Settings/saju/Desktop/input.xml

Treatment of entries already existing : Modify with new data

Press enter

In the same manner you should upload second file output.xml

That’s all, The process is completed

To verify that the new rate and class is created  go to

Gtaeway of tally>> Display>>Statutory info>>Vat classifications

There you can see newly added vat classes.

And in ledger creation screen you can see new vat calculation rate

By using the same xml file , you can create numorous tally rates and classes. But remember don’t forget to change the rate in xml file.