Tax Deducted at Source (TDS) is a kind of tax deduction subtracted at the time of specific payments made to the seller (deductee) by purchaser (deductor), such as, rent, commission, professional fees, interest, etc. when the amount is more than the minimum threshold limit exempted from deduction. The deductor then has to deposit the deducted amount to the Government which will be considered as a kind of advance tax paid on behalf of the deductee who received his/her deducted income.

The method helps the deductee to reduce his/her tax liability over the already tax deducted income and Government can keep a regulation of revenue over these incomes keeping a check on Tax Evasion. So, this tax process is the reverse of the general process of tax payment done by a taxpayer, where the payer is liable to deposit the tax instead of the seller. TDS is deducted on the basis of slab rate as specified by CBDT. TDS filing is usually done in quarterly basis per AY through online and offline options as available for the buyer. Buyer should issue a TDS certificate to the seller as a token of his/her TDS deduction.