Meaning of TDS
TDS means Tax Deducted at Source.
It is a tax which is to be deducted on some expenses and payments
As per Income Tax Act, persons responsible for making payments are required to deduct TDS at different rates.
Suppose Max Ltd provided Consultancy Service to ABC Ltd for 40000
In this case,ABC will pay Max Rs 40000.
However,if in this cases,TDS @ 10% is to be deducted, then ABC will deduct 4000,and pay Max only 36000
ABC will deposit this 4000 TDS with Government