How to create Contra Entries in Tally

How to create Contra Entries in Tally

Before explaining “How to Create Contra Entries in Tally”, let me explain you what is actually a contra entry.

In double entry accounting system, contra entry refers to an accounting entry which involves transfers between cash accounts and bank accounts or between different bank accounts.

What is a Contra Entry

In simple words, if the following transactions take place, it is a contra entry.

From Bank account to Cash account – This means when you are withdrawing money from bank such as ATM withdrawal for daily expenses or withdrawing big amount of cash for business or personal purposes.

The accounting entry for this transaction will be a contra entry.

From Cash account to Bank Account- This is the exact opposite of the above transaction. When you deposit money in bank, its accounting entry will be a contra entry.

From Bank account to another Bank account – It is common to have more than one bank account in business or for personal use. When you transfer your money from one bank account to another bank account, its accounting entry will be a contra entry.

From Cash account to another Cash account – This happened in old times where there were no commercial banks or proper banking channels and people usually did all the business in cash. In that old times, some businesses have different branches.

When cash was transferred from one branch to another, that will be a contra entry for  accounting purposes.

Although now a days, it is not prevalent and almost all business dealings are done through banking channels.

How to create a Contra Entry in Tally

Creating contra entry is Tally is same as creating a simple accounting voucher in Tally.

I will show you a step by step process by following which you can easily create contra entries in Tally for all the transactions which I described above.

In short I will create total four contra entries in Tally. They are:

  1. Bank Account to Cash Account
  2. Cash Account to Bank Account
  3. Bank Account to another Bank Account
  4. Cash Account to another Cash Account (although not widely used today.)

Contra Entry for Bank Account to Cash Account in Tally

Let’s start with the first one which is the contra entry for Bank Account to Cash Account.

For this entry you will need to create 2 ledgers namely, Bank Account and Cash Account.

Very few people know that the ledger for Cash Account is already pre-created by Tally. So you don’t have to create another Cash Account.

In this post, you will only have to create a Bank Account.

You can read this post on creating ledgers in Tally to know how you can create a ledger named Bank Account.

Now, to create a contra entry for Bank Account to Cash Account, go to Accounting Vouchers, from Gateway of Tally.

Select Contra from the right hand green colored sidebar as shown in picture below or just press F4 which is the shortcut for contra voucher in Tally.


A white screen will appear for creating contra voucher entry in Tally.

You need to create the contra entry in as shown in the picture.

Click on the image to see it clear.

This is how a contra entry for transferring money from a Bank Account to Cash Account is created in Tally.

In simple words, this entry says that I withdrew Rs.500 from my Bank Account. As soon as I withdrew it, it becomes cash therefore second account is Cash.

Let’s move on to the next contra entry which is opposite of what I created just above.

Contra Entry for Cash Account to Bank Account in Tally

In this entry we are depositing cash in the bank. Therefore the entry will be as under.

Click on the image to see it clear.

In the contra entry, I have transferred or deposited Rs.500 in the Bank.

Therefore the Cash Account is credited and Bank Account is debited.

Contra Entry for Bank Account to Another Bank Account in Tally

When we transfer money from one of our bank accounts to another bank account, this contra entry is required.

Click on the image to see it clear.

If you have more than two bank accounts and you transfer money in between them, then the accounting entry will be as described above.

Contra Entry for Cash Account to Another Cash Account in Tally

I have already said at the beginning of this post that this kind of transactions are now a days not occur in most businesses. But still as it is a form of a contra entry, I would like to cover it here.

Imagine if your business has two branches in the same city and you transfer cash from one branch to another branch, the entry will be as shown in the picture below.

Click the image to see it clear.

At the end…

These are the contra entries that are most widely used in any business or for personal accounting purposes.

Actual meaning of contra is opposite or against something. If I construe the meaning of contra in accounting, it means money transferred from one form to its opposite form.

For example, transferring money from bank to another bank or cash to bank. They are exact opposite. Hence the name contra entry.

If you have any questions or suggestions, comment down below and I’ll be happy to answer them all.

74 thoughts on “How to create Contra Entries in Tally

  1. barada says:

    from one account to another account transfer the cash means self transfer how it will be treated in tally

    • Rishit Shah says:

      Hi, Barada!

      This generally does not happen today because of banks.
      But still I’ve explained about transfers between Cash Account to another Cash Account in the post.

      You can go through it and you will easily understand it.

  2. Shubham says:

    When we deposit money in bank and it’s amount is written in journal . Can we change the amount in tally erp 9 when we withdraw money from bank

    • Rishit Shah says:

      Hi, Archana!

      Check your opening balance sheet figures once again and you will find the difference.
      Adjustment depends upon where the difference is.

      Please share details, so I can help you! 🙂

  3. prashant says:

    mne bank account(current a/c) open kia h. use open krn k ly mne apne personal account m se trasfer kie h pese. to ye cash to h ni jo m bank dr. to cash cr. se entry dikha du.
    to iski qa entry honi chaie or uska under head qa dalu.
    please help me if u can.

  4. Nidhi says:

    when i started my business i had only my personal bank a\c. so i paid all the expenses and stock exp from it only so when i am creating ledger for my personal ac what balance should i show as a opening balance? it should be actual or how much i used to start or let it go negative…… later i can debit that much amount
    Regards Nidhi

    • Rishit Shah says:

      Hi, Nidhi!

      You can enter your personal bank account while entering entry in Tally.
      When you are showing personal account, you can show personal bank account as it is with all the expenses.

      Show the actual.

  5. ugyen says:

    Hi Shan.what is mistake in contra voucher.when i entry contra gives duplicate list of ledger bank and and cash is not appearing

    • Rishit Shah says:

      Hi, Ugyen!

      There is no need to create cash ledger as it is already created in Tally by default.

      Duplicate error shows when you try to create ledger which is already created.
      Check your ledger list and you will find the mistake.

  6. monika says:

    so i just time before joined on your telly school i learned the things one thing which i not getting is that suppose i have an account ,then credit means the amount enters in my account and debit is that what i give to other one from my account so here something different i found,so why this will get change during working on telly.

  7. Vishal says:

    when we have transfer fund from one bank account to another bank account bank charges NEFT charges in this case bank charges ledger not shown during contra entry.

    Please help me.

  8. Niminsha says:

    Hi tidbit… I m niminsha. First of all I Would like to say Your method of teaching is too good. Rishit I m very much interested to learn tally.. I m not from commerce background. I can’t buy expensive books n DVD as my parents are retired and they are not well. Kindly suggest me Wat should I do

  9. Sudarshan says:

    Hi Rishit ,

    I am Sudarshan , what to do when sundry debtors showing cr balance , and sundry creditors showing dr balance , and how to adjust them ..

    • Rishit Shah says:

      Hi, Sudarshan!
      Change the groups.

      Change Sundry Debtors to Sundry Creditors because if it is showing credit balance, it is now the creditor.
      Same is to be done to the Sundry Creditors.

  10. Bipin Kumar Sharma says:

    Hi Rishit sir, I’m totally new. I want learn. How many days I can learn. And what type of education I can do and from where.

    • Rishit Shah says:

      Hi, Jeevan!

      Direct Expense means anything that is directly spent for a business.
      For example, salaries, daily expenses like electricity bills, phone bills and so on.

      Indirect expenses are expenses that are not directly related to the business but indirectly related to it.
      Such as political contribution to any party, donations and so on.

      It all really depends upon a business whether an expense should be direct or indirect.

    • Rishit Shah says:

      Hi, Liya!

      Cash deposit to bank entry will always be same.
      It will be:

      Bank a/c Dr
      To Cash a/c Cr

      Then, when you pay installment, the entry will be:

      Loan a/c Dr
      To Bank a/c Cr

  11. vijayakumar kumar says:

    Sir, Thank you very much fr the beautifull explanations. I am running a small business & use tally. I have 4 or 5 bank accounts. I use this Tally for my personal things also. I use them under -Drawings.Onlyfor the company accounts I create another company-
    put only relevant bank entries– sans personal exenses etc. It works fine . The funny part is all the bank entry is verified because of the bank statements , but in the end the cash account never shows the reality. Always it shows more. Every months I put the difference amount between the actual & amount shown – as adujtment / enter in drawings. Please help.

    • Rishit Shah says:

      Hi, Vijaykumar!

      You must be passing some less entries in the cash account or there must be something in bank reconciliation.

      If it is showing more, check all the entries. Then check all the bank entries and see the effects of them are being passed right.

      If all things are good, there should not be any difference.

  12. Ravinder singh says:

    Hello sir , i want to learn tally erp9 for only own business. I shall apply gst no. After learning tally and I can maintain own business in tally. And I want to file gst return himself.
    Can you send me learning step one by one.

  13. Vani Chelladurai says:

    Sir, In my personal a/c i’m transferring 10000 to my mom then which entry should i pass contra or payment

  14. Athanas says:

    Hi! Ritish
    Why from my tally when creating voucher,
    The leftside is written “Particulars” this is ok,no issue,
    But right side your tally video shows “Dr Cr ” but my tally shows “Amount”,what is wrong with my tally?

    • Rishit Shah says:

      Hi, Athanas!

      You have to disable the single entry option for that.

      From Gateway of Tally, go to Configure by pressing F12.
      Now, go to Voucher Entry.
      Now, set the option of Single Entry Mode to No.

      Also, set the option of Dr/Cr to Yes.

  15. Parmar Hetal says:

    sir mere cash in hand account me cash credit side dikha rahi bank ki cash ki entry contra me karti is right?

  16. vidushi soni says:

    any entry of bank will pass in sales because my sir teach me that deposite entry will be pass in sales is it right or wrong

  17. gurvinder singh says:

    agar sir mere do bank hai mane neft kiya hai ik bank se dosre bank mai to entry tally mai ik hi bank mai add hogi ya dono bank mai hogi

    • Rishit Shah says:

      [sociallocker]Hi, Gurvinder!

      Agar aap ek bank se doosre bank me transfer karte ho to Tally me entry dono hi bank account me add hogi.
      You have to do a contra entry for that in Tally.

      Suppose, you transfered ₹10,000 from Bank 1 to Bank 2.

      Bank 2 Dr ₹10,000
      To Bank 1 ₹10,000

  18. Agesha says:

    im from kerala.. im a big fan of u..this tutorial explained very doubts..becoz u explained it in very well…

    • Rishit Shah says:

      Hi, Grishma!

      Contra entry is used when there are transactions which includes only cash and bank accounts.
      So, the only transactions are cash withdrawal from bank and opposite of that.
      Transfer from one bank account to another bank account.

      Contra is just a fancy name for these kinds of transaction.

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