TDS Means Tax Deducted at Source

It is tax which is deducted on payments or expenses made by one person to another.

Person Deducting is called Deductor


Person whose TDS deducted is called Deductee



Professional Services given by Max to ABC of 40000

ABC will deduct TDS of 4000 and pay balance amount of 36000 to Max

ABC has to deposit this TDS of 4000 of the government


Here ABC is deductor and Max is Deductee


Duties of Deductor (ABC in Our case)

  • Obtain TAN Number (Tax Deduction Account number i.e. a number to deduct TDS)
  • Deduct TDS (on various expenses and payments)
  • Deposit TDS (by filling challan)
  • File TDS Return (it contains details of tax)
  • Generate and Issue TDS Certificate to Deductee (it is a proof of deduction given by deductor to deductee)


Duties of Deductee (Max in our case)

  • Collect TDS Certificate
  • Show TDS in Income Tax Return
  1. Income Tax
  2. Tax Deducted at Source (TDS)

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 9 years. He also provides Accounts Tax GST Training in Delhi and Pune.