What is TDS or Tax Deducted at Source? (All About TDS - A Simple Guide)

All About TDS - A Simple Guide

Confia Interactive - Finance Updates

Most of the times in our daily life, we keep on hearing about TDS or Tax Deducted at Source. We ask for TDS Certificates from Banks, Employer,etc for TDS deducted on our behalf.

Lets try to understand the concept of TDS in this series of "All About TDS - A Simple Guide." In this series, We Confia Interactive - Finance Team aims to provide you the understanding of TDS in laymans language. So, that next time when you deal with any of the TDS issues, you can understand them well.

What is TDS or Tax Deducted at Source?

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. Its a convenient mode of Payment of Tax.

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.

Hope, This was helpful to you. We will be posting few more informative updates in this series of "All about TDS - A Simple Guide."

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Confia Finance Team

Confia Interactive

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