How do I set up Zoho Books for GST compliance in India?

Go to Settings in Zoho Books, select Organisation Profile, and enter your GSTIN, business type, and state. Then go to Taxes and configure your GST rates (5%, 12%, 18%, 28%) with the correct IGST, CGST, and SGST split. Add HSN or SAC codes to your products and services. Finally, enable e-invoicing under GST Settings if your annual turnover is above the applicable threshold.

What chart of accounts should I use in Zoho Books for India?

Zoho Books comes with a default Indian chart of accounts that includes standard income, expense, asset, liability, and equity accounts. Customise it by adding accounts specific to your business -- for example, separate accounts for CGST payable, SGST payable, and IGST payable for GST filing. Your CA can review and adjust the chart of accounts in the first week of setup.

How does bank reconciliation work in Zoho Books for Indian bank accounts?

Zoho Books supports bank feeds from most major Indian banks including HDFC, ICICI, SBI, Axis, and Kotak via direct integration or CSV import. Once your bank account is connected, transactions appear automatically in the reconciliation view. You match them against invoices and bills in Zoho Books. Unmatched transactions are flagged for manual review. Most businesses complete monthly reconciliation in under an hour.

Can Zoho Books handle TDS (Tax Deducted at Source) for Indian businesses?

Yes. Zoho Books manages TDS on vendor payments under the applicable sections (194C for contractors, 194J for professional services, 194I for rent). When you record a vendor bill, Zoho Books applies the TDS deduction automatically and creates a vendor advance for the TDS amount. At the end of each quarter, it generates the data needed for TDS return filing.

Zoho Books Complete Setup: Indian Business Edition

Zoho Books is one of the best-suited accounting platforms for Indian businesses, it is built for GST compliance, handles TDS, generates e-way bills, and integrates with the GST portal natively. But like any accounting software, getting the setup right from the start saves months of correction later. This guide walks through every setup step for an Indian business, in the correct order.

Before you start: Have these ready: your GSTIN, PAN, TAN, bank account details, chart of accounts from your CA (or from Zoho Books vs Tally comparison), and your opening trial balance as of the setup date.

Step 1: Organisation Setup

Create Organisation In Zoho Books, go to Settings > Organisation Profile. Enter: Company Name (as registered), Registered Address, GSTIN (15-character), PAN, TAN (for TDS), Business Type (Private Limited, LLP, Proprietorship, etc.), and upload your company logo for invoice printing.

Financial Year Settings Settings > Preferences > Financial Year. Set: Start Month = April (standard for India), Fiscal Year End = March. This determines how Zoho Books calculates your annual P&L and balance sheet periods.

Currency and Base Settings > Currencies. Your base currency should be INR. If you have foreign currency transactions (USD, EUR), add those currencies and set exchange rate update method (manual or auto from RBI rates).

Step 2: GST Configuration

Enable GST Settings > Taxes > GST Settings. Enter your GSTIN. Select your GST filing frequency: Monthly (if turnover above Rs 5 crore) or Quarterly (QRMP scheme if below Rs 5 crore). Set your state of registration.

Create Tax Rates Settings > Taxes > Tax Rates. Create standard GST rates your business uses: GST 5% (food, medicines), GST 12%, GST 18% (most services and goods), GST 28% (luxury goods). For each rate, Zoho automatically handles the CGST/SGST/IGST split based on the supply state.

Configure E-Invoice (if applicable) If your turnover exceeds the e-invoice threshold (currently Rs 5 crore/year), enable e-invoicing in GST settings. This connects Zoho Books to the IRP (Invoice Registration Portal) to automatically generate IRN and QR codes when you save a sales invoice.

Step 3: Chart of Accounts

Review Default Chart of Accounts Zoho Books comes with a standard Indian chart of accounts. Go to Accounting > Chart of Accounts. Review the existing accounts, most are appropriate for an Indian company. Rename or add accounts to match your specific business (e.g., add “Direct Materials Cost” under Cost of Goods Sold if you are a manufacturing ERP solutions).

Add Industry-Specific Accounts Common additions for Indian businesses: TDS Payable accounts (one per TDS section: 194C, 194J, 194I, 194H), GST Input Credit accounts (CGST, SGST, IGST receivable), GST Output Tax accounts, Advance from Customers, Security Deposits.

Step 4: Items / Services Setup

Create Items Items > New Item. For each product or service: Name, HSN code (for goods) or SAC code (for services), Sales Rate, Purchase Rate, GST Rate, Unit of Measurement, and Account (Sales account for revenue mapping). Do not skip HSN/SAC codes, these are mandatory for GST returns.

Bulk Import Items If you have 20+ items, download the item import template from Items > Import. Fill in all items in the template. Import in one shot. Verify 5-10 records after import for accuracy.

Step 5: Contacts Setup

Import Customers Contacts > Import. Download customer template. Required fields: Display Name, Company Name, GSTIN (15-char), Billing Address (with state code), Email, Phone, Payment Terms (Net 30, Net 15, etc.), Credit Limit. Import and verify.

Import Vendors Same process for vendors. Additional vendor fields: TDS applicability (Yes/No), TDS Section (194C for contractors, 194J for professionals, etc.), PAN (mandatory for TDS deduction), Bank Details for NEFT payments.

Step 6: Bank Accounts and Opening Balances

Add Bank Accounts Banking > Add Account. Add each bank account: Bank Name, Account Number, IFSC Code, Account Holder Name. Set the opening balance as of your go-live date (get this from your bank statement or CA). Enable bank feed if your bank supports automatic statement import (most major Indian banks do through net banking integration).

Enter Opening Balances Accounting > Opening Balances. Enter the opening balance for every account in your chart of accounts as of go-live date. Your CA should provide this from Tally or previous system. The total debits must equal total credits, if they don’t, something is wrong with the migration data.

Step 7: Invoice Template and Preferences

Customize Invoice Template Settings > Templates > Invoices. Choose a base template. Customize: add your logo, company address with GSTIN prominently displayed, bank details for payment (Account No, IFSC, UPI QR), payment terms, invoice terms and conditions (e.g., “Subject to Pune jurisdiction”), and your signature.

Set Invoice Numbering Settings > Preferences > Invoices. Set your invoice prefix (INV, or financial year prefix like 2526/) and starting number. This becomes your invoice series for the year. Make sure it continues from your previous system’s numbering if you are mid-year.

Step 8: TDS Configuration

Enable TDS Settings > Taxes > TDS Settings. Enable TDS. The system creates standard TDS sections. For vendor bills, mark which vendors are subject to TDS and which section (194C for contractors, 194J for professionals, 194I for rent). TDS is deducted automatically when you record payment to those vendors.

GST Filing from Zoho Books

Once configured and transacting, your monthly GST filing process in Zoho Books:

Go to Taxes > GST Filing
Select the filing period (month and year)
Review step-by-step GST filing guide data: B2B invoices, B2C invoices, credit notes, exports
Reconcile with GSTR-2B (auto-populated data from GST portal)
File GSTR-1 directly through Zoho (GSP integration) or download JSON for manual filing
After GSTR-1 filing, compute GSTR-3B liability and pay via challan
File GSTR-3B

Reconciliation tip: Run the GSTR-2B reconciliation in Zoho Books before paying tax. This shows you how much ITC (Input Tax Credit) is available for offset against your output tax liability, reducing your cash tax payment.

Frequently Asked Questions

Can Zoho Books replace Tally for Indian accounting?

Yes, for most Indian SMEs. Zoho Books handles everything Tally does for GST, including GSTR-1, GSTR-3B, e-way bills, and TDS. Zoho Books adds significant advantages: cloud access from anywhere, automatic bank feeds, integrated CRM connection, and a cleaner user interface. Some advanced Tally features (like complex payroll structures in Tally ERP 9) may need to move to Zoho Payroll separately.

Does Zoho Books work with the GST portal directly?

Yes. Zoho Books has direct GSP (GST Suvidha Provider) integration with the GSTN portal. You can file GSTR-1 and reconcile GSTR-2B directly from Zoho Books without downloading files and uploading them manually to the GST portal.

How do we handle RCM (Reverse Charge Mechanism) in Zoho Books?

Zoho Books supports RCM transactions. When creating a vendor bill subject to RCM, mark the transaction as “Reverse Charge.” Zoho Books creates the appropriate accounting entries: GST liability on the purchase side, and ITC credit when the conditions for claiming it are met.

Bottom line: Zoho Books, when set up correctly for India, gives you a GST-compliant accounting system with e-invoicing, TDS, bank reconciliation, and financial reporting, all in the cloud. The setup investment of 4-8 hours pays back in every month of faster, more accurate accounting thereafter.

Aaxonix sets up Zoho Books for Indian businesses with correct GST configuration, chart of accounts, and opening balance migration. Contact us to get your Zoho Books set up right from day one.

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