What is TDS fee?

TDS applies to various types of payments, including salaries, rents, commissions, interests, and professional fees. By deducting the tax at the source, the government ensures that a significant portion of the tax liability is fulfilled before the end of the financial year.

The primary objective of TDS is to broaden the tax base and minimize tax evasion. It encourages taxpayers to disclose their income accurately and pay taxes promptly, as the deducted amount is credited against their total tax liability.

The TDS rates vary depending on the nature of the payment and the recipient's tax bracket. For instance, the TDS rate for salary payments is generally lower than that for rent or professional fees.

Tax Deducted at Source (TDS) is a taxation mechanism employed by governments to ensure timely collection of taxes. This system requires the payer to deduct a certain percentage of tax from the payment made to the recipient before disbursing the funds.

The payer is responsible for depositing the deducted TDS amount with the government within a specified time frame. Failure to do so can result in penalties and interest charges.