Debit Note in Tally Prime (Alt+F5): Purchase Return [2026]

In commercial accounting, businesses regularly encounter situations where delivered materials must be returned due to transit damages, defective quality, or short shipments. Alternatively, price corrections may occur when a supplier mistakenly overbills. To document these adjustments legally and balance your accounts payable, you must issue a Debit Note.

In Tally Prime, recording purchase returns using the Alt+F5 shortcut is vital for reversing Input Tax Credit (ITC) under Section 34 of the CGST Act, adjusting vendor balances, and updating physical stock. This guide outlines the exact accounting rules, step-by-step voucher setup, and automation workflows.

1. Core Accounting Rule for Purchase Returns

A purchase return reverses the original purchase entry. It reduces your accounts payable to the vendor and reduces your inventory asset or trading expense value.

2. Shortcut Key: Tally Prime (Alt+F5) vs Tally.ERP 9 (Ctrl+F9)

Many experienced bookkeepers who recently transitioned from Tally.ERP 9 press Ctrl+F9 and find it opens a Receipt Note voucher instead of a Debit Note.

3. How to Enable Inactive Debit Note Voucher

If pressing Alt+F5 does not respond, the Debit Note voucher type is currently set to inactive. To enable it:

1. From Gateway of Tally, press V (Vouchers).
2. Press F10 (Other Vouchers) on the top right toolbar.
3. Click Show Inactive.
4. Scroll down to Debit Note under Accounting Vouchers.
5. Press Enter and select Yes to activate the voucher type.

4. Step-by-Step Entry Procedure (Item Invoice Mode)

1. Open Debit Note: Press Alt+F5 from the Vouchers screen.
2. Select Entry Mode: Press Ctrl+H and choose Item Invoice for physical goods returns, or Accounting Invoice for rate discounts without stock movement (review our Trade vs Cash Discount SOP).
3. Party Ledger & Original Invoice Details: Select the vendor in Party A/c Name. In the pop-up dialogue, enter the Original Invoice No. and Original Invoice Date from the initial purchase bill.
4. Purchase Ledger: Select Purchase Return (or your primary GST Purchase ledger).
5. Item Details: Enter the stock items, returned quantities, and original unit purchase rates.
6. Taxes: Select matching tax ledgers (Input CGST + Input SGST for local vendors, or Input IGST for out-of-state vendors). Tally automatically calculates the tax reversal amount.
7. Provide GST Details: Set to Yes. Select reason code 01-Sales Return or 02-Post Sale Discount and enter the debit note serial number.
8. Bill-Wise Details: In the bill allocation dialogue, select Agst Ref (Against Reference) and choose the original purchase bill. Press Ctrl+A to save.

5. GST Compliance & ITC Reversal (Section 34)

Under Section 34(1) of the CGST Act, when goods are returned to a supplier, the buyer must reduce their Input Tax Credit claim. In Tally Prime:

• The Debit Note entry automatically credits your Input GST ledgers, reflecting as an ITC reversal in GSTR-3B Table 4(B)(2) "Others".
• When your supplier declares the corresponding Credit Note in their GSTR-1, it reflects as a reduction in your GSTR-2B statement. Linking the voucher properly ensures your books match the portal perfectly and avoids tax notices. See our guide on reconciling GSTR-1 and GSTR-3B in Tally.

6. Bill-Wise Linking (Against Reference)

A frequent mistake made by data entry operators is saving debit notes as New Reference or On Account. This leaves the original purchase bill pending under Outstanding Payables and distorts your ageing analysis.

Always choose Agst Ref to knock off the return value from the original purchase invoice. This ensures that when payment is settled via Payment voucher (F5) or bank statement import (see our bank statement to Tally automation), the payable balance reflects the net discounted figure.

Related SOPs & Tutorials