What is the shortcut key for Credit Note in Tally Prime?

The shortcut key for Credit Note in Tally Prime is Alt+F6. From Gateway of Tally, open Vouchers (press V) and press Alt+F6.

How do I link a Credit Note to the original invoice in Tally Prime?

During Credit Note voucher entry, specify the original invoice number and date in the Party Details screen. In Bill-wise details, select 'Against Ref' (Agst Ref) and choose the original sales invoice from the pending list.

When should I issue a Credit Note under GST?

A Credit Note is issued under Section 34 of the CGST Act for: 1) Sales returns due to damaged or substandard goods, 2) Post-sale discounts or price reductions, 3) Correction of overcharged invoice amounts, or 4) Deficiency in rendered services.

What is the difference between Credit Note and Debit Note in Tally Prime?

A Credit Note (Alt+F6) is issued to a customer (debtor) to reduce their receivable balance (sales return). A Debit Note (Alt+F5) is issued to a supplier (creditor) to reduce the payable balance (purchase return).

How does TrulyInvoice handle credit notes and purchase bills?

TrulyInvoice reads vendor debit notes, customer credit notes, and supplier purchase invoices using AI OCR, automatically matches them against original vouchers, and synchronizes them into Tally Prime via local Port 9000 in 15 seconds.

Credit Note Entry in Tally Prime (Alt+F6): Sales Return

A Credit Note is a legal commercial document issued by a seller to a buyer. It is used to reduce the buyer's liability or notify them that their account has been credited. Common reasons for issuing a credit note include sales returns (goods returned due to damage or quality issues), post-sale discounts, correction of billing errors (overcharging), or deficiency in services.

In TallyPrime, recording credit notes using the Alt+F6 shortcut is crucial for maintaining accurate accounts receivable, tracking physical inventory returns, and adjusting your output tax liability. Under the GST regime, credit notes must be carefully linked to the original sales invoices to ensure correct GSTR-1 reporting and avoid audits. This guide outlines the legal parameters, step-by-step entry procedures, and automation best practices.

Quick Answer: How to Record Credit Note Entry in Tally Prime (Alt+F6)?

Record Credit Notes in Tally Prime via Alt+F6 (Credit Note Voucher). Link the voucher to the original sales invoice number and date under Bill-Wise details (Against Ref) to ensure compliant GSTR-1 reporting under Section 34 of the CGST Act.

Shortcut: Press Alt+F6 on the Vouchers screen to open Credit Note.
Use Ctrl+H to switch between Item Invoice (stock return) and Accounting Invoice.
Always link to original invoice number under Bill-Wise Details (Against Ref).
TrulyInvoice AI OCR matches customer credit notes against original sales invoices for instant Tally sync.

GST Regulations: Section 34 of the CGST Act

Under Section 34 of the CGST Act, when a registered supplier issues a credit note, they must adhere to strict regulatory compliance standards:

Original Invoice Linkage: The credit note must reference the original invoice number and date against which the adjustment is being made. Unlinked credit notes will trigger mismatches during automated GST department audits. Read our guide on how to fix mismatches between GSTR-1 and GSTR-3B in Tally.
GST Adjustment: If goods are returned or prices are lowered, the supplier can reduce their output tax liability. However, this is only allowed if the customer has not already claimed input tax credit (ITC) on the original amount, or if they reverse their claimed ITC.
Timeline: Credit notes relating to a financial year must be declared in the GSTR-1 of the corresponding month or before November 30 of the succeeding financial year.

Step-by-Step Guide: Recording a Credit Note in TallyPrime

Before recording a credit note, ensure the voucher type is active. (Go to Gateway of Tally > Vouchers > F10 (Other Vouchers) > Show Inactive > Credit Note to activate it if it isn't listed).

Step 1: Open the Credit Note Screen

From the Gateway of Tally, navigate to Vouchers. Press Alt+F6 (or click Credit Note in the right-side vertical button bar).

Step 2: Choose the Entry Mode

Press Ctrl+H (Change Mode) to select the appropriate entry format:
• Item Invoice: Use this if the customer is returning physical stock items.
• Accounting Invoice / As Voucher: Use this for financial-only credits, such as billing adjustments or post-sale discounts where no stock is returned (review our Trade Discount vs Cash Discount SOP).

Step 3: Enter Party Details & Original Invoice Info

Select the customer's ledger in the Party A/c Name field. In the pop-up window, fill out the Original Invoice No. and Original Invoice Date. This establishes the necessary audit trail for GST reconciliation.

Step 4: Record Return Details & Tax Adjustment

Select the Sales Return ledger (or Sales A/c). If in Item Invoice mode, select the specific inventory item, specify the returned quantity, and enter the rate. Under the item details, select the matching tax ledgers (CGST, SGST, or IGST). Tally will automatically calculate the tax reduction.

Step 5: Provide GST Details & Issue Reason

A prompt for Provide GST Details will appear. Set this to Yes. In the sub-screen, select the reason for issuing the credit note (e.g., 01-Sales Return, 02-Post-Sale Discount, or 03-Deficiency in Services). Enter the supplier's credit note reference number and date.

Step 6: Settle Bill-Wise Details

In the Bill-wise Details screen, select Agst Ref (Against Reference) and select the original sales invoice from the list of outstanding bills. This updates the customer's ledger balance correctly.

Write a narration (e.g., "Being credit note issued to Acme Corp for sales return of 5 Lenovo laptops under invoice #INV-102") and press Ctrl+A to save.

⚡ Tally Voucher Automation

Stop Typing Purchase Bills & Returns Manually

Entering supplier bills, credit notes, and debit notes manually takes hours. TrulyInvoice AI reads supplier PDFs, auto-matches inventory SKUs and ledgers, and posts error-free vouchers directly into Tally Prime via local Port 9000 sync in 15 seconds.

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Accounting Entry Visualization

Here is how Tally structures the debits and credits for a sales return of goods worth Rs. 20,000 (excluding 18% GST):

Dr. Sales Return A/c --------------------- Rs. 20,000 (Reduces sales revenue)
Dr. CGST Output A/c ---------------------- Rs. 1,800  (Reduces tax liability)
Dr. SGST Output A/c ---------------------- Rs. 1,800  (Reduces tax liability)
Cr. Customer A/c (Sundry Debtor) --------- Rs. 23,600 (Reduces outstanding balance)

Automate Purchase & Return Vouchers with TrulyInvoice

Managing sales returns, GST purchase vouchers, and debit notes is historically error-prone. Customer service teams often issue credit notes with mismatched tax rates, or fail to link them to the original sales invoice. This leads to discrepancies during GST audits and causes errors in GSTR-1 filings.

TrulyInvoice automates this workflow:

When you upload a customer's credit note request or a vendor's debit note, TrulyInvoice's AI instantly scans the document.
It searches your Tally records to identify the original sales invoice, validating items, quantities, and GST rates.
It generates a pre-configured Credit Note voucher inside TallyPrime with the correct tax codes, reasoning codes, and original invoice links.
This prevents GSTR-1 mismatches, simplifies accounts receivable audits, and ensures that your physical inventory balances match your ledger entries.

Related SOPs & Automation Guides

Purchase Invoice Automation (F9)

Automate multi-page purchase bills, item taxes, and ledger mapping in 15 seconds.

GST Purchase Entry SOP

Step-by-step F9 purchase voucher rules, intra-state vs inter-state tax ledgers.

Credit Note Entry in Tally Prime (Alt+F6): Sales Return & GST Section 34 SOP [2026]