To calculate TDS on Lower rate or zero rate do the following steps
Go to Gateway of Tally > Accounts info > ledgers > Alter > Party master
e.g. Mr Ramu
In party master press F12 and enable the option “Allow advanced entries in TDS master” and accept the screen.
From party master screen enable the option “Use Advanced TDS entries” and press enter.
Enable the option “Set/Alter Zero/lower Deduction”.
1) Select nature of payment
2) Select the section 197: Lower deduction or 197A : Zero deduction
3) Provide Certificate number.
4) Mention applicable from and to date. e.g.: 1-4-2015 to 31-3-2016.
5) Mention TDS lower rate e.g.:- default rate is 10%. Mention rate as 5%.
Accept and save.
Now when you pass TDS transaction for the applicable date i.e 1-4-2015 to 31-3-2016 TDS will deduct 5% instead of 10%.