TDS (Tax Deducted at Source)
RegulationA means of collecting income tax in India, where the person responsible for making specified payments is required to deduct tax at source.
TDS (Tax Deducted at Source) is a system introduced by the Income Tax Department where the person responsible for making specified payments (like salary, commission, professional fees, interest, rent, etc.) is liable to deduct a certain percentage of tax before making the full payment.
In Bank Statements:
You will often see TDS entries in your bank statement related to:
- Interest Income: Tax deducted on interest earned from Fixed Deposits or Savings Accounts.
- Salary/Payments: Tax deducted by an employer or client before the net amount is credited to your account.
Analyzing TDS entries is crucial for tax planning and ensuring that the correct amount of tax has been credited to your PAN (Permanent Account Number).
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