What is TDS?
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TDS or Tax Deducted at Source is an income tax that is reduced when a certain payment like rent, salary, commission, interest, professional fees, etc. is made by the person who made such a payment. As per the Income Tax Act, any company or a person is required to deduct tax at the source itself if the money paid exceeds a certain amount. The person who receives a payment also has a liability to pay tax.
The purpose of TDS may have been to reduce the chance of evasion by the recipient of the incomes. But, for an honest taxpayer, it also brings a few benefits.
Tax Deducted at Source (TDS) is a procedure implemented by the Indian government to collect taxes at the source of income. A certain percentage of tax is deducted by the payer at the time of making payments to the receiver, and this amount is then remitted to the government.