Tax Deducted at Source (TDS) is one of the methods of collecting income tax from the income tax payers or assessees in India. In such cases, tax is directly collected at the source at which the income arises or generates. Whenever any specified type of income arises or accrues to an individual, Income Tax Act calls for the deduction of a specific percentage of such income, in the form of income tax paid by the individual, and payment of only the remaining amount to the recipient of such income.
Tax deducted in this manner needs to be deposited in the Government treasury and assigned to the Central Government, within a stipulated time period. Indian Government is adhering to the policy of TDS to broaden its tax bracket in the country. Income gained through several sources falls under the tax deduction at source or TDS scheme. Some of such income that are subjected to ‘Tax Deduction at Source’ are as follows:
