TDS

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Baljeet Kaur

Baljeet Kaur (Querist)
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23 November 2010 can any one please tell me what is TDS in detail

S. Karthi

S. Karthi (Expert)
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27 November 2010 Tax deducted at source (TDS), as the very name implies aims at collection of revenue at the very source of income. It is essentially an indirect method of collecting tax which combines
the concepts of “pay as you earn” and “collect as it is being
earned.” Its significance to the government lies in the fact that
it prepones the collection of tax, ensures a regular source of
revenue, provides for a greater reach and wider base for tax. At
the same time, to the tax payer, it distributes the incidence of tax
and provides for a simple and convenient mode of payment.

The concept of TDS requires that the person on whom
responsibility has been cast, is to deduct tax at the appropriate
rates, from payments of specific nature which are being made to
a specified recipient. The deducted sum is required to be
deposited to the credit of the Central Government. The recipient
from whose income, tax has been deducted at source, gets the
credit of the amount deducted in his personal assessment on the
basis of the certificate issued by the deductor.

While the statute provides for deduction of tax at source on
a variety of payments of different nature, in this booklet, an
attempt is being made to discuss various provisions relevant only
to the salaried class of taxpayers.