Tax Deducted at Source (or TDS) is a mode of tax collection used by the income tax department of India to collect revenue directly from the source of income. It is done by withholding the specified amount of revenue from the payments of different kinds, such as salary, commission or contract, before it is made to the taxpayer. It is a simple method to distribute the burden of tax upon the payee and provides the taxpayer a convenient mode of payment. The employer is required to subtract the payable amount, based on the average rate of income tax, and deposited to the credit of Central Government.
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What is TDS and at what rate it is deducted?
