Predefined Groups in Tally Prime

Prerequisites: Module 7 — Groups and Ledgers

Learning Objectives

By the end of this module, you will be able to:

• Name all 28 pre-defined groups in Tally Prime
• Identify whether a group appears on the Balance Sheet or P&L
• Distinguish between direct and indirect expenses/income
• Map any ledger to its correct pre-defined group

Tally's Pre-Defined Group Structure

Tally Prime comes with 28 pre-defined groups (also called primary groups and sub-groups). You cannot delete these — but you can create your own groups under them. All ledgers ultimately trace back to one of these 28 groups.

The 28 groups are organised under two primary parents:

Capital & Liabilities (Balance Sheet — Right side)
    ├── Capital Account
    ├── Loans (Liability)
    │   ├── Bank OD Accounts
    │   ├── Secured Loans
    │   └── Unsecured Loans
    ├── Current Liabilities
    │   ├── Duties & Taxes
    │   ├── Provisions
    │   └── Sundry Creditors
    └── Suspense A/c

Assets (Balance Sheet — Left side)
    ├── Fixed Assets
    ├── Investments
    ├── Current Assets
    │   ├── Bank Accounts
    │   ├── Cash-in-Hand
    │   ├── Deposits (Asset)
    │   ├── Loans & Advances (Asset)
    │   ├── Stock-in-Hand
    │   └── Sundry Debtors
    └── Misc. Expenses (Asset)

Income (Profit & Loss — Credit side)
    ├── Sales Accounts
    └── Indirect Income

Expenses (Profit & Loss — Debit side)
    ├── Purchase Accounts
    ├── Direct Expenses
    └── Indirect Expenses

All 28 Groups — Complete Reference Table

Direct vs Indirect — A Common Confusion

Direct Expenses are costs that are directly related to bringing goods to a saleable condition:

• Freight/carriage inward (cost to bring goods to warehouse)
• Loading/unloading charges
• Custom duty on imports
• Packaging material costs

These go into the Trading Account and affect Gross Profit.

Indirect Expenses are operating costs not directly tied to individual products:

• Salaries of office staff
• Rent of office/showroom
• Electricity bill
• Depreciation
• Advertising
• Bank charges

These go into the Profit & Loss Account and affect Net Profit only.

Direct Income (Sales Accounts) = primary revenue from core business.

Indirect Income = non-primary revenue:

• Discount received from suppliers
• Interest earned on bank deposits
• Commission received
• Rent received (if your core business is not rental)

How This Applies to Sunrise Retail

Sunrise Retail's April 2025 operations generated several direct and indirect items. Here is how they classify:

Key Distinctions

Sunrise Retail — Complete Ledger-to-Group Mapping

Practice Exercise

Exercise 1: Sunrise Retail takes a ₹10,00,000 term loan from SBI (secured against the furniture). Under which group does the "SBI Term Loan" ledger go?

Exercise 2: Classify each of these Sunrise Retail ledgers into the correct Tally group:

1. Rent received from sub-letting a portion of their office space
2. Carriage paid for bringing phones from TechWorld to Sunrise warehouse
3. Provision created for doubtful debts (CloudStore)
4. Advance tax paid (₹25,000 advance corporate tax)
5. Drawings account for Kiran Sharma's personal withdrawals

Common Ledgers Under Each Group

The single most common question new trainees ask: "Which group does this ledger go under?" This lookup answers that for the 12 most-used groups. Use it as a reference card when setting up a fresh Tally company — the names follow standard small-business chart-of-accounts conventions.

1. Capital Account

• Kiran Sharma — Capital
• Sneha Reddy — Capital
• Drawings — Kiran Sharma
• Drawings — Sneha Reddy
• Proprietor's Current Account
• Partner's Current Account

2. Reserves & Surplus

• General Reserve
• Capital Reserve
• Share Premium A/c
• Investment Allowance Reserve
• Debenture Redemption Fund
• Premium on Issue of Debentures
• Profit & Loss A/c (carried forward)

3. Loans (Liability)

• SBI Term Loan
• HDFC Vehicle Loan
• Director's Loan — Kiran Sharma
• Unsecured Loan from Sneha Reddy
• Bank Overdraft — SBI
• Cash Credit Facility — ICICI

4. Current Liabilities — Duties & Taxes

• CGST Output
• SGST Output
• IGST Output
• CGST Input Credit
• SGST Input Credit
• IGST Input Credit
• TDS Payable (Section 194J / 194C / 194I)
• TCS Payable
• Professional Tax Payable
• Income Tax Payable

5. Current Liabilities — Provisions

• Provision for Doubtful Debts
• Provision for Income Tax
• Provision for Audit Fees
• Provision for Bonus
• Provision for Gratuity
• Provision for Discount on Debtors

6. Current Liabilities — Sundry Creditors

• TechWorld Distributors Pvt Ltd
• Galaxy Electronics
• Sparsh Tech Solutions
• Bharti Airtel (Telecom Bill Payable)
• Krishna Properties (Landlord)
• Outstanding Salary Payable
• Outstanding Electricity Payable
• Advance from Customer — Tech Park Retail

7. Fixed Assets

• Land
• Building — Madhapur Office
• Furniture & Fixtures
• Computer & Equipment
• Office Equipment
• Plant & Machinery
• Vehicles — Maruti Ertiga
• Software (Licensed)

8. Investments

• Fixed Deposit — SBI
• Mutual Fund Units — HDFC Equity
• Shares in Listed Companies
• Government Securities
• Long-term FD — Axis Bank
• Investment in Subsidiary

9. Current Assets — Cash & Bank & Stock

• Cash-in-Hand: Cash, Petty Cash, Cash at HITEC Showroom
• Bank Accounts: SBI Current A/c (Madhapur), ICICI Current A/c, HDFC Savings A/c
• Stock-in-Hand: Closing Stock — Mobile Phones, Closing Stock — Laptops, Closing Stock — Accessories
• Sundry Debtors: Digital Hub Retail, CloudStore Online Pvt Ltd, Tech Park Retail Store
• Loans & Advances (Asset): Advance to Suppliers, Advance to Staff (Ramesh), Advance Tax Paid, TDS Receivable, GST Refund Receivable, Prepaid Insurance, Prepaid Rent
• Deposits (Asset): Security Deposit — Office, Rent Deposit — Landlord, Telephone Deposit, Electricity Deposit

10. Sales Accounts

• Sales — Electronics (Local)
• Sales — Electronics (Interstate)
• Sales — Exports (Zero-rated)
• Sales — Mobile Phones
• Sales — Laptops
• Sales — Accessories
• Sales Returns (typically shown as deduction)

11. Purchase Accounts (also Direct Expenses sub-group)

• Purchases — Mobile Phones
• Purchases — Laptops
• Purchases — Accessories
• Purchases — Interstate
• Purchase Returns (typically shown as deduction)
• Direct Expenses (under Purchase Accounts): Freight Inward / Carriage Inward, Loading & Unloading Charges, Customs Duty on Imports, Octroi, Packaging Material (production-side)

12. Indirect Expenses

• Salary
• Rent
• Electricity
• Telephone & Internet
• Bank Charges
• Audit Fees
• Legal & Professional Fees
• Printing & Stationery
• Postage & Courier
• Repair & Maintenance
• Depreciation
• Advertisement & Marketing
• Travelling Expenses
• Discount Allowed
• Bad Debts
• Interest on Late Payment
• Insurance

13. Direct Incomes (rare — most income is Indirect)

• Sale of Scrap (if linked to core business)
• Servicing & Repair Income (if it's a primary service line)

14. Indirect Income

• Discount Received
• Interest Received (on FDs, savings, customer overdues)
• Commission Received
• Rent Received (from sub-letting)
• Profit on Sale of Asset
• Bad Debts Recovered
• Foreign Exchange Gain

How to use this list:

• Open Tally → create a new ledger → look up the ledger name in this list → use the group shown
• If a ledger isn't in this list, ask: "Is it asset, liability, income, or expense?" → narrows to the right section
• For GST ledgers, always use Duties & Taxes — regardless of whether it's an input credit (asset-side balance) or output liability (liability-side balance). Tally handles the netting at report time.
• For provisions, always use Provisions (under Current Liabilities) — even if the provision is for an asset (like Provision for Doubtful Debts, which deducts from Debtors on the balance sheet).

Key Terms

Module Summary

• Tally Prime has 28 pre-defined groups that form the backbone of the chart of accounts
• Groups belong to four primary sections: Capital/Liabilities (Balance Sheet), Assets (Balance Sheet), Income (P&L), Expenses (P&L)
• Direct expenses affect Gross Profit; Indirect expenses affect Net Profit
• All GST ledgers (input and output) go under Duties & Taxes — regardless of whether they are assets or liabilities
• The complete Sunrise Retail chart has 33+ ledgers mapped to their correct groups
• When in doubt about a group, ask: "Is this asset, liability, income, or expense?" — that narrows it to the right section immediately

Quick Quiz

Test yourself before moving on:

1. Freight paid to bring purchased goods from supplier to warehouse goes under:

• a) Indirect Expenses
• b) Direct Expenses
• c) Purchase Accounts
• d) Current Liabilities

2. Which group does "IGST Input Credit" ledger belong to in Tally?

• a) Current Assets
• b) Sundry Debtors
• c) Duties & Taxes
• d) Indirect Income

3. Sunrise Retail's security deposit paid to the landlord (₹2,00,000) belongs under:

• a) Loans & Advances (Asset)
• b) Deposits (Asset)
• c) Fixed Assets
• d) Current Liabilities

4. How many pre-defined groups exist in Tally Prime?

• a) 15
• b) 22
• c) 28
• d) 35

Next: Module 9 — Accounts Only Mode — Using Tally in accounts-only mode for pure financial accounting, recording Sunrise Retail's opening entries and first week's transactions.