TDS: Tax Deduction at Source
In this article we will see what is the full form of TDS, what is TDS and why do we need to understand this term.
The full form of TDS is tax deduction at source. It is a process that is followed by the income tax department under the income tax act of 1961 which is managed by CBDT(Central Board Of Direct Taxes). The CDBT is a department of Indian revenue which is managed by Indian Revenue Services.
What is TDS
TDS is the deduction of tax at the source, such as if you are a salaried person with an annual income under that tax slab.
This TDS process deducts tax at the time of paying your salary, at the end of the financial year when you file your income tax return and show your savings then all the deducted taxes refunds by government and only the calculated tax amount is deducted as per the tax slab.
Objective Of Tax Deduction at Source
- To enable the salaried people to pay the tax as they earn every month. This helps them in paying the tax in easy instalments and avoids the burden of a lump sum payment.
- To collect the tax at the time of payment of income to various assesses such as contractors, professionals etc.
- The government requires funds throughout the year. Hence, advance tax and tax deducted at source help the government to get funds throughout the year and run the government expenses smoothly.
Other full forms
- AVI full form, history and its features [full explanation]
- CBI full form, History and Working in India
- What is the PUC Full Form and why it is required?
Hope you enjoyed the article Full Form of TDS.
Enjoying reading the articles!
Thanks for reading!
Visit our travel blog here