Hi everyone, I’m currently pursuing the Chartered Accountant (CA) course in India, and I have a doubt regarding the taxation module. Can anyone help me understand the concept of tax deducted at source (TDS) in a simplified way? I find it a bit confusing. Thanks in advance!
TDS is basically a method of collecting income tax at the source of income itself. For example, if you receive a salary, your employer deducts a certain amount of tax from your salary before paying you. This ensures that income tax is collected in a timely manner and prevents tax evasion.
Hey there! TDS is like a prepayment of your income tax. If you earn any income that is subject to TDS, the person or entity paying you the income deducts a percentage of it as tax and pays the remaining amount to you. The deducted tax is then deposited with the government on your behalf. Hope that helps!
TDS is a mandatory process that promotes accountability and transparency in the collection of taxes. It prevents tax evasion and helps in proper revenue management for the government. If you have any specific questions about TDS, feel free to ask!
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