TDS, or Tax Deducted at Source, refers to the practice of deducting a certain amount of tax by the payer from payments made to the payee. The Income Tax Law mandates specific tax payers making  certain payments to withhold some amount as TDS  and pay it directly to the Government.

This obligation applies to various types of payments such as salary, interest, commission, brokerage, professional fees, royalty, and contract payments. The entity deducting TDS is referred as the deductor, while the other entity  subject to the tax deduction is referred to as the deductee.

The deductor withholds the TDS amount from the payment to be made and subsequently deposits this deducted tax with the government, crediting it to the account of the payee. The deducted amount can then be adjusted against the tax liability of the payee.

In addition to depositing the tax, the deductor is required to file a TDS return, providing various details about the Payee and the nature of payment. This return is a quarterly statement submitted to the Income Tax department and is mandatory for deductors to file on time.

To begin with , every tax deductor needs to obtain a
Tax Deduction Account number (TAN).

The details required for TAN include:

• Proof of Address: Voter’s ID / Aadhar Card/ Driving License/ Passport
• PAN Card
• Email and Mobile number of the applicant / Authorised Person.
• DSC of the Authorised Person, in case the applicant is other than Individual