What Tally's Group Company does
In TallyPrime you can create a Group Company and choose its member companies. Open the group, and its balance sheet, profit and loss and trial balance show the members' figures added together, group by group and ledger by ledger. For sister companies that keep identical books, that is a quick combined view.
If every member is a wholly owned Tally company in rupees, with the same chart and no trading between them, that total is close to a consolidated figure. As soon as there is intercompany trading, a foreign subsidiary or an outside shareholder, it isn't.
Adding up is only the first step of consolidation, though. Consolidated financial statements present the group as if it were a single company, so anything the members did with each other has to come out, foreign subsidiaries have to be translated, and the share owned by outside shareholders has to be shown separately.
What Group Company doesn't do
| What a consolidation needs | TallyPrime Group Company |
|---|---|
| Members in different currencies | Members need the same base currency |
| Different charts of accounts | Members need the same chart of accounts |
| All members included | Only companies open in that session are consolidated |
| Intercompany eliminations | None documented: both sides stay in the totals |
| Non-controlling interests | None documented |
| Members on Zoho, Xero or QuickBooks | Not possible: members must be Tally companies |
TallyPrime 7.1 (May 2026) added Schedule III Division I output for single companies.
The missing eliminations are the costly part. Say the parent sells ₹50 lakh of goods to its subsidiary, and the subsidiary sells all of them on to customers before year end:
| Line | Parent | Subsidiary | Group Company | Eliminations | Consolidated |
|---|---|---|---|---|---|
| Sales | 300.00 | 180.00 | 480.00 | (50.00) | 430.00 |
| Cost of goods sold | (210.00) | (120.00) | (330.00) | 50.00 | (280.00) |
| Gross profit | 90.00 | 60.00 | 150.00 | – | 150.00 |
Profit is the same either way. Revenue is overstated by ₹50 lakh, about 12%, which flows into margins, turnover-based thresholds and anything a lender reads off the top line.
Set up Tally for consolidation
Most of the work of a clean consolidation happens in the books, long before year end. In each company:
- One ledger per group company, named after it. In the parent, "Northwind Exports Pvt Ltd" under Sundry Debtors; in the subsidiary, "Northwind Holdings Pvt Ltd" under Sundry Creditors. Loans go under Loans & Advances (Asset) on one side and Loans (Liability) on the other.
- Separate income and expense ledgers for group trading. "Sales – group companies", "Purchases – group companies", "Management fees – group". Then the amounts to eliminate are one ledger each, not buried in general sales.
- Bill-wise details on intercompany parties. Open invoices then match by reference on both sides.
- Confirm balances every month. Send the other company its ledger and agree the closing balance. Differences found in May are easy; differences found in the following April aren't.
- Know a branch transfer from a sale. Stock moved between branches of the same company isn't intercompany: it's one legal entity. Goods moved between two group companies are a sale and a purchase, with GST, and need eliminating.
- Similar ledgers under similar groups. Tally's primary groups are fixed, but sub-groups and ledgers differ between companies. The closer they are, the less mapping you do later.
Eliminate intercompany, including GST
Group companies with different GSTINs charge each other GST like anyone else, and that catches people out at consolidation. Say the parent invoices the subsidiary in another state ₹1,00,000 plus 18% IGST for services:
| Ledger | Parent | Subsidiary | Eliminate |
|---|---|---|---|
| Sales – group companies | (1,00,000) | – | 1,00,000 |
| Professional fees – group | – | 1,00,000 | (1,00,000) |
| Northwind Exports / Northwind Holdings | 1,18,000 | (1,18,000) | nets to nil |
| Output IGST | (18,000) | – | keep |
| Input IGST | – | 18,000 | keep |
The receivable and payable are eliminated at the invoice total, ₹1,18,000. The sale and expense are eliminated net of GST, ₹1,00,000. The GST ledgers stay: they are balances with the government, not with each other.
If the subsidiary can't claim the input credit, it books ₹1,18,000 as an expense. You still eliminate ₹1,00,000 against the sale, and the ₹18,000 stays in the group's costs, because the group really paid it. The same logic covers loans (eliminate the loan and the interest) and dividends (eliminate the parent's dividend income against the subsidiary's distribution). The intercompany eliminations guide has worked tables for each.
Subsidiaries in other currencies
A common shape for an Indian group: the parent on Tally in rupees, and a subsidiary in the US, UK or Singapore keeping its books in dollars, pounds or Singapore dollars, often on QuickBooks or Xero. Group Company can't combine those.
Under Ind AS 21, translate the foreign subsidiary's assets and liabilities at the closing rate, its income and expenses at the transaction-date rates (an average rate is the usual practical substitute), and take the difference to a foreign currency translation reserve in other equity. Companies on the older Accounting Standards follow AS 11, which treats some foreign operations differently, so check which applies with your auditor. Our Xero consolidation guide works through a translation reserve with numbers.
Present it under Schedule III
Section 129(3) of the Companies Act, 2013 requires a company with subsidiaries, associates or joint ventures to prepare consolidated financial statements in the same form and manner as its own. In practice that means Schedule III: Division I for companies on the Accounting Standards, Division II for companies on Ind AS. Schedule III also asks consolidated statements for additional information, such as each entity's share of consolidated net assets and of profit or loss.
The guide to consolidated financial statements in India covers who must prepare them, the deadlines and the filing.
How Halfkit's Tally agent works
TallyPrime is desktop software, so Halfkit can't reach it over the internet the way it reaches cloud ledgers. A small Windows agent on the PC running Tally does the reading.
- Install the agent on the Tally PC. Run it once with
--installand it schedules itself to sync daily, which suits a PC left unattended. Or use the tray app,halfkit_tally_tray.exe: it starts at logon without admin rights, shows the last sync and its result, and has Sync now, Open Halfkit and the log in its menu. The tray app is new, and keeps its sync token encrypted in your Windows profile. - It reads Tally's own connector. With TallyPrime running, the agent reads its built-in connector on port 9000.
- It sends balances, not transactions. Only group names, ledger names, closing balances and open bills (party, reference, dates, amount) leave the PC. No vouchers.
- Halfkit builds the statements. P&L, balance sheet, and receivables and payables aging for parties tracked bill by bill.
- You consolidate. Put the Tally company in a group with other Tally, Zoho Books, Xero or QuickBooks companies. Halfkit suggests shared lines for similar ledger names and intercompany pairs, including ledgers named after the other company. Accept them, set the share owned, and choose a reporting currency.
Checklist before you consolidate
- Every member company has the same financial year, usually April to March.
- Each intercompany ledger is named after the other company, on both sides, with bill-wise details on.
- Intercompany balances are confirmed between companies for the month.
- Group sales, purchases, fees and interest sit in their own ledgers.
- GST on intercompany invoices stays in the GST ledgers.
- Foreign subsidiaries' figures are in their own currency, with the rates you'll use.
- You know each subsidiary's ownership percentage and, if it was bought, the acquisition figures.
- You know whether the group reports under Division I or Division II.
Comparing tools for this? See how Halfkit compares, or read about consolidation in Halfkit.