Active Stocks
Fri May 24 2024 15:59:27
  1. Tata Steel share price
  2. 174.80 -0.37%
  1. NTPC share price
  2. 374.85 0.68%
  1. State Bank Of India share price
  2. 828.60 -0.45%
  1. ITC share price
  2. 436.10 -1.16%
  1. Power Grid Corporation Of India share price
  2. 318.50 -0.39%
Business News/ Money / Calculators/  What is tax deducted at source (TDS)?
BackBack

What is tax deducted at source (TDS)?

Tax is deducted at the prescribed rate by the tax department if the permanent account number (PAN) is provided by the recipient of income or at the rate of 20% or at the maximum marginal rate of 35.88% in the absence of PAN

iStockPremium
iStock

Tax deducted at source (TDS) is the process of charging and collecting tax at the source of income. Each source of income—from salary, interest, commission, rent, brokerage, professional fees, royalty, and others—attracts TDS.

It is deducted at the prescribed rate by the tax department if the permanent account number (PAN) is provided by the recipient of income or at the rate of 20% or at the maximum marginal rate of 35.88% in the absence of PAN. The deductor is liable to remit the collected tax into the account of the central government within the stipulated time. The recipient of income can make a declaration to avoid paying unnecessary TDS. For instance, in case of interest income on bank deposits, as per the provisions of section 197A of the Income-tax Act, 1961, if the depositor estimates her income to remain below the basic threshold limit, a self declaration in Form 15G or Form 15H can be furnished by her if she is below 60 years of age or above 60 years, respectively. This is to avoid the trouble of obtaining a refund of unnecessary deducted tax.

You are on Mint! India's #1 news destination (Source: Press Gazette). To learn more about our business coverage and market insights Click Here!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 24 Apr 2018, 08:26 AM IST
Next Story footLogo
Recommended For You