Calculate Tax Deducted at Source (TDS) percentages.
Tax Deducted at Source (TDS) is a system introduced by the Income Tax Department of India to collect tax at the very source of income generation.
The rationale is simple: If the government waited until the end of the year and asked citizens to calculate and pay their total tax bill all at once, many people would either forget, spend the money beforehand, or deliberately evade paying. By enforcing TDS, the government ensures a steady stream of revenue throughout the year and drastically reduces tax evasion.
No. This is a very common misconception. TDS is merely an advance payment of tax made on your behalf by the person paying you (e.g., your employer, your bank paying FD interest, or your client paying a freelancer invoice).
When you file your Income Tax Return (ITR) at the end of the year, you calculate your actual total tax liability for the year based on your tax slab.
You do not need to manually keep track of every TDS deduction made by every client or bank. All TDS deducted against your PAN is officially recorded by the government in a master ledger called Form 26AS. When you file your taxes, this data is automatically imported into your return.
If a company deducts 10% TDS from your freelancer invoice, does that mean your total tax liability on that income is exactly 10%?
