The full form of TDS is Tax Deducted at Source. It is one of the tax-collecting methods used in India. TDS is managed and governed by the Indian Income Tax Act 1961 and managed by the Central Board of Direct Taxes (CBDT). In a company, the employer of that Company collects the taxes from the employee and sends them to the income tax department. You can also say that it is a part of a revenue department that is managed by the Indian Revenue Service (IRS). This tax is deposited within a specified time in the treasury of the Indian Government.
The rate of deduction of this tax is not uniform, it varies from 1% to 30% or more, on the basis of the entity at which it is applicable. There are two identities that are involved in this TDS system are – (a) Deductor and (b) Deductee.
(a) Deductor – they are the person or the company who used to look after all the tax deductions or is responsible for all the deduction of money ( taxes ) before making the payment.
(b) Deductee – they are the person from whom the tax payment is deducted or who has the liability to pay the taxes.
Rule of TDS deduction
TDS is deducted only if your total income is able to tex. Yet, TDS will not be deducted in case your total income is Rs. 2,50,000 and this amount is applicable for men and women below the age of 60 years.
Reminder: TDS deduction rate on salary ranges from 5% to 30% which is similar to the applicable income tax slabs.
The Tax Deducted at Source (TDS) must be deposited to the government by the 7th of the subsequent month. Interest is calculated at the rate of 1.5% per month. In the case of a TDS refund, the refund amount is credited approximately in 3 to 6 months.
There is a defined rate for Tax Deduction Tax (TDS). For taxable income up to Rs. 2,50,000, TDS is nil. For taxable income of Rs. 2,50,000 to Rs. 5,00,000, TDS is 5%. The TDS is 20% for taxable income of Rs. 5,00,000 to Rs. 10,00,000. For taxable income which is above Rs. 10,00,000 is 30%.
| Term | Full Form |
| TDS | Tax Deducted at Source |
FAQ’s
The full form of TDS is Tax Deducted at Source. It is one of the tax collecting method used in India. TDS is managed and governed by Indian Income Tax Act 1961 and managed by Central Board of Direct Taxes (CBDT). In a company the employer of that Company collects the taxes from the employee and send it to the income tax department.
TDSis short form of Tax Deducted at Source.
Tax Deducted at Source is Full Form of TDS.
It comes under section 192 of TDS and salaries act. It deduct on the behalf of ROI income tax slab for the current year. For the year of assessment 2020 and 2021 the exemption is around for an individual is 2,50,000
There are four type of form type in TDS.
Form 16, form 16 A, form 16 B, form 16 C
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