Income Tax
TDS (Tax Deducted at Source)
Tax deducted from payments by the payer and deposited with the government on behalf of the payee.
Full Definition
Tax Deducted at Source (TDS) is a mechanism where the payer deducts a prescribed percentage of tax from certain payments — salary, rent, interest, professional fees, contractor payments — and deposits it with the government. The payee receives the net amount and can claim TDS credit in their ITR to avoid double taxation. TDS certificates (Form 16 for salary, Form 16A for others) are issued by the deductor. Key TDS sections: 192 (salary), 194A (interest), 194J (professional fees), 194C (contractors), 194-IA (property purchase).
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More Income Tax terms
ITR (Income Tax Return)
Annual declaration filed with India's Income Tax Department reporting income, deductions and tax paid.
AY (Assessment Year)
The year in which income earned in the previous financial year is assessed and taxed.
FY (Financial Year)
The 12-month period from April 1 to March 31 during which income is earned and recorded.
PAN (Permanent Account Number)
Unique 10-character alphanumeric identifier issued by the Income Tax Department to every taxpayer.
TAN (Tax Deduction Account Number)
10-character number required by entities that deduct or collect tax at source (TDS/TCS).