APPLICABILITY OF TDS

Applicability of Tax Deducted at Source

TDS means 'Tax Deducted at Source'. TDS is one of the modes of collection of taxes, by which a certain percentage of amount is deducted by a person at the time of making/crediting certain specific nature of payment to the other person and deducted amount is remitted to the Government Account.

Why TDS ?

TDS is based on the principle of ‘pay as and when you earn’. TDS is a win-win scenario for both the taxpayers and the government.

•    Responsibility sharing for deductor and tax collection agencies.
•    Prevents tax evasion.
•    Widens the tax collection base.
•    Steady source of revenue for the government.
•    Easier for a deductee as tax gets automatically collected and deposited to the credit of the central government.
•    TDS certificate is issued wherever TDS has been collected, typically by the deductor or a bank.
•    TDS is exempted on some payments made to government, RBI, cooperative societies etc.
•    Refunds can be requested if there are discrepancies in the collected amount and the actual payable amount.