Tax Deducted at Source
TDS
Beginner Level
India
Taxation
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Definition
A system where tax is deducted at the point of income generation, ensuring regular tax collection.
Detailed Explanation
TDS applies to salaries, interest, rent, professional fees, etc. The deductor pays the tax to the government. TDS rates vary by income type. Form 16/16A provides TDS certificate.
Example
An employer deducts TDS from an employee's salary and deposits it with the Income Tax Department.
Local Context (India)
TDS is a key mechanism for India's tax compliance, collecting tax at source rather than relying on voluntary filing.