TDS Full Form
by Yogi P - October 15, 2023
What is the full form of TDS and how does it work?
TDS stands for Tax Deducted at Source. It is a system of tax collection in India where the tax is deducted at the source of the income instead of being collected directly from the taxpayer. This helps to reduce tax evasion and ensure that the government receives its revenue on time.
TDS applies to a variety of incomes, including salaries, commissions, interest, and dividends. The rates of TDS vary depending on the type of income and the taxpayer’s status.
For example, the TDS rate for salaries is 10% for up to Rs. 5 lakh, 20% for Rs. 5 lakh to Rs. 10 lakh, and 30% for above Rs. 10 lakh.
The person making the payment is responsible for deducting the TDS and depositing it with the government. This person is known as the deductor. The person receiving the payment is known as the deductee.
The deductor is required to provide the deductee with a TDS certificate, which shows the amount of TDS deducted and deposited on their behalf. The deductee can use this certificate to claim a refund of any excess TDS deducted.
Why is TDS important?
TDS is important because it helps to reduce tax evasion and ensure that the government receives its revenue on time. It also makes it easier for taxpayers to file their returns and pay their taxes accurately.
How to check your TDS status
You can check your TDS status by logging into the TRACES website of the Income Tax Department. You will need your PAN number and password to log in.
Once you are logged in, you can click on the “TDS” tab to view your TDS status. You can see the amount of TDS deducted and deposited on your behalf by various deductors.
Conclusion
TDS is an important part of the Indian tax system. It helps to reduce tax evasion and ensure that the government receives its revenue on time. It also makes it easier for taxpayers to file their returns and pay their taxes accurately.