what is the full form of TDS?

TDS stands for “Tax Deducted at Source.” It is a tax collection mechanism used in several countries, including India, to collect income tax at the source of income itself. In the context of India, TDS requires a person or entity making payments (such as salary, interest, rent, etc.) to deduct a certain percentage of the payment as income tax before making the payment to the recipient. This deducted tax is then remitted to the government on behalf of the recipient, who can claim credit for the TDS amount against their total income tax liability when filing their tax return. TDS helps the government ensure a steady source of tax revenue and reduces tax evasion.