Search for Tally interview questions and you will find dozens of lists explaining what a voucher is and how VAT works in Tally ERP 9.
VAT has not applied for nine years. And an employer hiring a Tally user in 2026 is not worried about whether you can define a ledger. They are worried about two things that broke this year: GST rates changed in September 2025, and every TDS ledger had to be remapped to new payment codes from April 2026. Someone who cannot handle that configuration work costs them a return.
This guide covers the fundamentals properly, then the part no other guide covers.
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The configuration questions employers are actually asking
GST rates changed. How do you update them in TallyPrime?
Rate details sit at multiple levels — company, stock group, stock item and ledger — and the correct approach is to update at the level where the rate is actually defined, using effective-date-based rate history rather than overwriting the existing rate.
This matters because invoices dated before 22 September 2025 must still compute at the old rate, while invoices from that date compute at the new one. If you overwrite instead of adding a dated revision, you break every historical document and your returns will not reconcile.
What sets you apart: naming the effective-date approach unprompted. Almost no candidate does.
TDS section codes changed in April 2026. What did that mean in Tally?
From 1 April 2026 the Income-tax Act, 2025 replaced the 1961 Act, TDS moved under Sections 392, 393 and 394, and challans and returns use numeric payment codes instead of section numbers like 194C or 194J.
In Tally that means every TDS nature-of-payment master had to be reviewed and remapped, and the software updated to a release supporting the new codes and return forms. Quoting a legacy section code on a challan after the changeover causes the payment to fail or mismatch.
What sets you apart: saying you would verify the exact payment code on the income tax portal rather than quoting one from memory. The codes are specific and getting one wrong is expensive.
How do you keep Tally current with statutory changes generally?
Stay on a supported release, apply statutory updates when Tally releases them, and verify after each update that rate masters, nature-of-payment masters and return formats reflect the change. Then run a test invoice and a test return before going live on real data.
Basic TallyPrime questions for freshers
What is Tally and what is it used for?
Accounting and business management software widely used by Indian small and medium businesses for bookkeeping, inventory, payroll, GST compliance, TDS and financial reporting.
What is the difference between Tally ERP 9 and TallyPrime?
TallyPrime is the current generation, with a redesigned interface, a global search that lets you move between reports without exiting, simplified multitasking, and ongoing statutory updates. Tally ERP 9 is the older product. The practical point for an interview is that statutory support — GST rate changes, new TDS codes, e-invoicing — arrives on the current product, which is why businesses migrated.
What is a Company in Tally?
A separate set of books for one organisation, with its own financial year, statutory settings and data. Tally supports creating and switching between multiple companies, and viewing them in a group for consolidated reporting.
What is a Ledger?
An account that records transactions of a particular type — a specific bank account, a vendor, a sales account, a tax account. Every voucher entry posts to ledgers.
What is a Group?
A classification that gathers ledgers of similar nature, such as all bank accounts under Bank Accounts or all vendors under Sundry Creditors. Groups determine how balances roll up into the financial statements. Tally ships with a set of predefined groups and allows user-created ones under them.
Which ledgers does Tally create automatically?
Cash and Profit & Loss Account are created with every new company. Neither can be deleted, though Cash can be renamed.
What is a Voucher?
The record of a transaction — its date, ledgers, amounts and narration. It is the basic unit of entry in Tally.
What is Tally Vault?
A password mechanism that encrypts company data so the company name does not appear in the company list without the password. Note that if the Tally Vault password is lost, the data cannot be recovered — worth saying, because it shows you understand the risk.
What are the shortcut keys you use most?
Name real ones you use daily rather than reciting a table — the voucher type shortcuts, the company selection shortcut, and the save and quit keys. Shortcut recall is a common quick-fire round, so check the current key assignments in your TallyPrime release before the interview, since some changed from ERP 9.
Vouchers and entries
What are the main voucher types?
Payment, Receipt, Contra, Journal, Sales, Purchase, Credit Note, Debit Note, plus inventory vouchers such as Delivery Note, Receipt Note and Stock Journal, and order vouchers for purchase and sales orders.
What is a Contra voucher used for?
Transactions between cash and bank, or between two bank accounts — a cash deposit, a cash withdrawal, an inter-bank transfer. It records movement of funds without any income or expense.
When do you use a Journal voucher?
For adjustment entries that do not involve cash or bank — depreciation, provisions, accruals, prepaid adjustments, rectification entries, transfers between ledgers.
What is the difference between a Debit Note and a Credit Note?
A debit note is raised on a purchase return or when a supplier has undercharged; a credit note is raised on a sales return or when you have overcharged a customer. In a GST context both must be linked to the original invoice and reported in the return.
What is the difference between single entry and double entry mode?
Single entry mode simplifies payment and receipt entry by letting you post against multiple ledgers against one cash or bank account. Double entry mode shows the full debit and credit structure. Double entry is the correct mode for anything other than straightforward payments and receipts.
What is an optional voucher?
A voucher marked optional is recorded but excluded from the books and reports until it is regularised. It is used for provisional entries — a quotation-stage sale, a pending approval — so the data is captured without affecting balances.
What is a post-dated voucher?
A voucher dated in the future, excluded from current balances until its date arrives. Commonly used for post-dated cheques and scheduled payments.
Inventory and stock
What is a Stock Item, Stock Group and Unit of Measure?
A stock item is an individual product tracked in inventory. A stock group classifies similar items. A unit of measure defines how quantity is expressed — pieces, kilograms, litres — and Tally supports compound units such as boxes of twelve pieces.
What are the stock valuation methods available?
FIFO, LIFO, weighted average, standard cost, last purchase cost and others, set at the stock item level. The method affects closing stock value and therefore reported profit.
What is a Godown or Location?
A physical or logical storage location. Enabling godowns lets you track the same stock item across multiple warehouses, branches or bins.
What is a Stock Journal used for?
Transferring stock between godowns, and recording manufacturing consumption and production where a bill of materials converts raw materials into finished goods.
What is a Bill of Materials?
A defined list of components consumed to produce one unit of a finished item. With a BOM configured, recording production automatically consumes the components and adds the finished goods.
What is Batch-wise details used for?
Tracking stock by batch number with manufacturing and expiry dates. Essential in pharmaceuticals, food and chemicals, where expiry management and recall traceability are required.
GST in TallyPrime
How do you enable GST in TallyPrime?
Through the statutory features in company settings, entering the registration type, GSTIN, state and applicability date. Rate details are then set at company, stock group, stock item or ledger level as appropriate.
How do you record a GST sales invoice?
Through a sales voucher with the party ledger carrying a valid GSTIN, the correct place of supply, the stock item or sales ledger carrying the right HSN or SAC and rate, and the applicable tax ledgers. Tally determines CGST and SGST versus IGST from the place of supply against the company's registered state.
How does Tally decide between CGST/SGST and IGST?
By comparing the place of supply on the voucher with the company's registered state. Same state produces CGST and SGST; different state produces IGST. This is why an incorrect party state configuration produces the wrong tax on every invoice for that customer.
How do you generate GST returns from Tally?
Through the GST returns reports, which summarise outward and inward supplies and flag transactions with incomplete or mismatched information before export. The correct workflow is to clear every exception in that report first, then export for filing.
What is the exception report and why does it matter?
It lists vouchers with missing GSTIN, missing HSN, incorrect tax rates, mismatched place of supply or incomplete information. Filing without clearing it produces returns that do not reconcile with your books, which surfaces later as a 2B mismatch or a notice.
What sets you apart: saying you clear exceptions before export rather than after filing.
How does e-invoicing work in Tally?
For businesses above the applicable turnover threshold, invoices are reported to the Invoice Registration Portal to obtain an IRN and signed QR code. TallyPrime supports generating and printing these directly. Confirm the current threshold and reporting time limit before quoting them.
TDS in TallyPrime
How do you enable and configure TDS?
Through statutory features, then by setting up nature-of-payment masters with the applicable rate and threshold and tagging the relevant party ledgers as subject to deduction. After the 2026 changeover, those masters must reflect the current payment codes rather than legacy section numbers.
How does Tally handle threshold limits?
Nature-of-payment masters carry the threshold, and Tally tracks cumulative payments to a party so deduction triggers once the limit is crossed. The common error is creating a separate ledger for the same vendor, which splits the cumulative total and suppresses deduction.
How do you record a TDS deduction on a purchase?
Through the purchase or journal voucher with the party ledger tagged for deduction and the TDS ledger applied, so the net payable to the vendor and the TDS liability are both recorded.
How do you generate a TDS challan and return?
Through the TDS reports, which produce the challan details for deposit and the quarterly statement for filing. Verify that your release supports the current return forms before the quarter closes.
Reports and reconciliation
How do you do a bank reconciliation in TallyPrime?
Through the banking section, entering the bank date against each voucher to match it to the statement. The unreconciled balance shows the remaining difference. Most releases support importing a bank statement to auto-match entries, which is far faster for high-volume accounts.
What is the Day Book?
A report listing all vouchers entered for a given day or period, including optional and post-dated ones. It is the first place to look when investigating what was entered and by whom.
Which reports do you use most in a month-end close?
Trial balance, profit and loss, balance sheet, bank reconciliation statement, outstanding receivables and payables with ageing, stock summary, and the GST and TDS statutory reports.
What is a Cost Centre?
A unit against which income and expenses are allocated — a department, a branch, a project, a salesperson. Cost categories allow the same transaction to be allocated across more than one dimension simultaneously.
How do you produce branch-wise profitability?
By setting up each branch as a cost centre and allocating income and expense vouchers to it, then running the cost centre profitability report. For inventory-heavy branches, godowns are used alongside so stock is tracked per location.
Practical scenario questions
A client's Tally balance sheet does not match their bank statement. What do you check?
Run the bank reconciliation first — most differences are timing, from cheques issued but not presented and deposits not yet credited. Then check for unrecorded bank charges, interest and direct debits, duplicate entries, and entries posted to the wrong bank ledger. Only after that look for genuine errors.
Closing stock shows zero even though inventory exists. What could be wrong?
Check whether stock items have opening balances and whether inward vouchers were recorded as accounting-only entries without inventory effect. Check whether the valuation method is producing a zero rate because no purchase cost is attached. Check godown allocation, and check whether the period selected excludes the relevant transactions.
An accountant entered several vouchers in the wrong financial year. How do you fix it without losing data?
Identify the affected vouchers through the day book filtered by date, then correct the voucher dates individually rather than deleting and re-entering, so the audit trail is preserved. Check whether any of those vouchers were included in a return already filed — if so, the fix is not just in Tally and requires a correction in the relevant statutory filing too.
What sets you apart: recognising that a period error may have a statutory consequence, not just a bookkeeping one.
The GST payable per your books does not match the return. How do you investigate?
Compare the GST reports against the ledger balances, clear the exception report, check for vouchers entered without tax applicability, check for rate mismatches — especially around the September 2025 changeover date — and check for credit and debit notes not linked to original invoices.
How do you prevent data loss?
Scheduled backups to a separate location, restricted user access with defined rights, Tally Vault where appropriate, and verification that backups actually restore. Saying you test restores rather than just take backups is the answer interviewers remember.
Advanced features
What is Budgeting used for in Tally?
Setting budget figures against ledgers, groups or cost centres and running variance reports against actuals. Useful for departmental cost control.
What is Job Costing?
Tracking revenue, material and expense against an individual project or job, to produce project-level profitability. Common in construction, manufacturing and services businesses that price per contract.
How do you manage multiple companies?
Create each as a separate company and switch between them, or load several simultaneously and use a group company for consolidated reporting where the structure allows.
What is the audit trail requirement and how does Tally handle it?
Indian companies subject to the requirement must maintain accounting software with an edit log recording changes to entries, which cannot be disabled. TallyPrime maintains this log in supported releases. Check the current applicability before stating who it applies to.
What security features would you configure for a team of five?
User creation with role-based rights, restricting who can delete vouchers or alter closed periods, enabling the edit log, and separating entry rights from approval rights. The principle is that no single user should be able to both create and delete a transaction without trace.
How to prepare
Know your release. Shortcut keys and feature locations changed between Tally ERP 9 and TallyPrime, and between TallyPrime releases. Confirm what your version does before the interview rather than reciting a list from a blog.
Be ready for the statutory questions. The GST rate update and the TDS code remapping are the two questions that separate someone currently working from someone who last used Tally in 2023.
Prepare three scenarios you actually resolved. A reconciliation that would not tie, a stock valuation problem, a return that did not match the books.
Practise explaining, not just doing. Many Tally users can perform a task but cannot describe the logic behind it, which is exactly what an interview tests.
Practise with a role-specific AI mock interview on BeSkill — browse the finance and accounting interviews or the Taxation interview library.
Related reading: Accounts Executive Interview Questions 2026 · GST Interview Questions 2026 · TDS Interview Questions 2026