TDS (Tax Deducted at Source)

Income tax deducted by the payer at the time of certain payments and deposited with the government on the payee's behalf.

TDS is a mechanism under the Income Tax Act where the person making specified payments (like salary, rent, professional fees, contractor payments) deducts a percentage as tax and deposits it with the government.

The deductee gets credit for the TDS against their final tax liability. The deductor must deposit it on time and file TDS returns, issuing certificates (like Form 16/16A).

• Deducted at source on notified payments at specified rates.
• Deductor deposits the tax and files returns.
• Deductee claims it as credit against income tax.