Debit Note in Tally Prime – Meaning, Purpose, and How to Record It (2025 Full Guide)

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A Debit Note Voucher in Tally Prime is one of the most important documents used in purchase returns, supplier adjustments, GST corrections, and accounting reconciliations. Whether you are running a trading business, manufacturing unit, service firm, or accounting practice, understanding how debit notes work is essential for accurate financial records.

This complete, non-copyrighted 6-minute guide explains:

✔ What a debit note is
✔ When a debit note voucher is used in Tally Prime
✔ Why businesses issue debit notes
✔ GST rules for debit notes
✔ How to record debit notes step-by-step
✔ Common mistakes to avoid
✔ Real examples for clarity

Let’s begin.

 What Is a Debit Note in Accounting?

A Debit Note is a document issued by a buyer to a supplier to show that the buyer is reducing the amount payable to the supplier.
In simple words:

➡You issue a Debit Note when you want to reduce the supplier’s bill amount.

It increases the supplier’s debit and reduces your liability in books.

 Debit Note Voucher in Tally Prime Is Typically Used To Record:

A Debit Note Voucher in Tally Prime is used for:

✔ 1. Purchase Returns (Returning goods to supplier)

If goods received are damaged, defective, or extra quantity was sent, you issue a debit note.

✔ 2. Reduction in Purchase Value

If supplier gives additional discount after issuing invoice.

✔ 3. Reversal of Input GST (ITC)

If you return goods, proportionate GST must also be reversed.

✔ 4. Incorrect Invoice Received

Corrections in rate, quantity, tax, or value.

✔ 5. Supplier Reconciliation Adjustments

Sometimes supplier ledger balances need adjustments. Debit notes help in correcting the books.

✔ 6. Overbilling by Supplier

If supplier charges higher than agreed price.

✔ 7. Short Supply of Goods

Debit note is issued when fewer items are delivered than billed.

✔ 8. Reverse Entry of Wrong Purchase Booking

If purchase was wrongly entered, debit note can be used for reversal.

In all these cases, Debit Note reduces the payable amount and adjusts stock and GST accordingly.

 GST Rules for Debit Notes (Important for 2025)

Under GST, the buyer (recipient of goods) can issue a Debit Note when:

• Goods are returned
• Supplier invoice has errors
• ITC needs reversal
• Value of purchase is to be corrected

GST Impact:

• GST charged earlier must be reversed
• Debit Note reflects in GSTR-2B
• Supplier sees Debit Note in GSTR-1A (if enabled)
• Helps maintain GST-compliant purchase register

 How to Enable Debit Note Voucher in Tally Prime

Step-by-step:

1️⃣ Go to Gateway of Tally
2️⃣ Navigate to Settings → Voucher Type
3️⃣ Select Debit Note
4️⃣ Enable option: Use Debit Note
5️⃣ Save (Ctrl + A)

OR simply press:

➡Change Mode → Debit Note (Ctrl + F9)

 How to Pass a Debit Note Entry in Tally Prime (Step-by-Step)

Scenario Example:

You purchased goods worth ₹20,000 plus GST from a supplier, but goods worth ₹5,000 were damaged and returned.

Step 1: Open Debit Note Voucher

➡ Press Ctrl + F9
Voucher opens in Debit Note mode.

Step 2: Select Supplier Ledger

This is the creditor whose amount is being reduced.

Step 3: Enter Stock Item (If Purchase Return)

Enter:

• Quantity
• Rate
• Amount
• GST details (auto-calculated)

Stock will be reversed.

Step 4: GST Adjustment

Tally automatically reverses:

• CGST
• SGST
• IGST

as per original purchase.

Step 5: Narration

Example:

"Debit Note raised for purchase return due to damaged goods worth ₹5,000 with GST reversal."

Step 6: Save Voucher (Ctrl + A)

Your debit note is recorded successfully.

 Example of a Debit Note Entry (Simple Format)

Debit:

• Supplier A/c
• Input GST Reversal
• Purchase Return A/c

Credit:

• Stock Item
• Purchase Ledger

This reduces the supplier's outstanding balance.

Different Types of Debit Notes in Tally

1. Accounting Debit Note

For financial adjustments, discounts, or corrections.

2. Inventory Debit Note

For stock returns or damaged goods.

3. GST Debit Note

Automatic GST reversal entry.

 How Debit Note Affects Books of Accounts

Buyer’s Books:

• Supplier ledger decreases
• Stock decreases (if goods returned)
• Purchase value decreases
• GST ITC decreases

Supplier’s Books (Opposite Effect):

• Sales return
• Decrease in revenue
• GST liability reduces

 Common Mistakes Users Make While Passing Debit Notes

❌ Selecting wrong ledger (Purchase instead of Purchase Return)

❌ Forgetting GST classification

❌ Entering incorrect quantity

❌ Not enabling debit note in voucher type

❌ Not matching original invoice details

❌ Using journal entry instead of debit note

These mistakes lead to inaccurate GST returns and mismatched books.

 Tips to Avoid Errors in Debit Note Entries

✔ Always match details with original purchase invoice
✔ Re-check GST components
✔ Use proper narration for audit clarity
✔ Verify stock movement
✔ Check outstanding report after entry

 Final Summary

A Debit Note Voucher in Tally Prime is primarily used to record:

✔ Purchase returns
✔ Supplier adjustments
✔ Overcharged invoices
✔ GST reversals
✔ Value corrections

It helps maintain accurate books, proper supplier reconciliation, and GST compliance.

When you understand how Debit Notes work, your purchase and GST reports become cleaner, more accurate, and audit-ready.

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