TDS is an Indirect Tax, that is deducted by an employer or the TDS deductor and then this deducted amount is deposited to the Government of India by the TDS deductor. Tax Deducted at Source is generally managed by the Central Board of Direct Taxes.
What is TDS or Tax Deducted at Source?
Tax Deducted at Source is a tax that is deducted from an individual’s salary on occasional intervals. This tax is deducted before the payment is made to the deductee by the Tax Deducted at Source Deductor and then deposited to the Government of India, by the Tax Deducted at Source Deductor.
How is TDS calculated?
Payments such as salaries, interest payment, commission, fees to lawyers and freelancers etc. are subject to TDS and the employer or the Tax Deducted at Source deductor must deduct the Tax Deducted at Source amount before making the payment to the TDS Deductee or the employee. For salaries, the percentage of Tax Deducted at Source will be based on income tax slabs. Similarly, each type of income has its own percentage of tax that is calculated when the amount is beyond certain limit. Since Tax Deducted at Source is collected at source without the calculation of investment that is eligible for tax deductions, hence, an individual can declare and submit his investment proof later while filing Income Tax return and claim the Tax Deducted at Source refund or Tax Refund.
TDS Challan 281
The Challan No 281 is used for depositing the Tax Deducted at Source/TCS. While filling Challan no 281, you will have to mention the details like you will need to mention the correct 10-digit Tax Deduction Account Number (TAN), name, and address of the deductor on each challan used for depositing tax. You can verify the TAN of your Tax Deducted at Source deductor from the official Government E-filing portal before you deposit the Tax Deducted at Source/TCS amount. Taxpayers are supposed to fill different challans for depositing the tax deducted under different sections.
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