Vyavsay School
← Glossary

TDS

Tax deducted at source: income tax the payer takes off certain payments and deposits with the government on the payee's behalf.

When a business pays rent, a contractor's or professional's fee, or salaries above certain levels, it may have to deduct part of the payment as tax, pay it to the government and file a return saying so. The person paid gets credit for it against their own income tax, through their PAN.

Deducting means you need a TAN and must deposit and file on time. Being deducted from means checking that the tax shows against your PAN, so you are not taxed twice.

Learn it in a lesson

See also: TAN