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What is the full form of TDS:

TDS represents Tax Deducted at Source.

It is a type of income tax which is collected by the government of India. TDS needs to be deposited in the Government treasury. There is a specified time limit within which the tax needs to be deposited.TDS can range from 1 % to 30 % or sometimes even more. The percentage of TDS which needs to be deposited depends on the entity.

Tax Deducted at Source or TDS is deducted by the Deductor. Deductor can be either a person or a company which deduct the TDS before the payment is made. If an employer pays a salary to the employee, the employer needs to deduct the TDS before paying the salary. Every deductor should hold a Tax Deduction Account Number (also known as TAN). TAN is a unique number given by government to all the Deductors.

The person who pays the tax is called as the Deductee. Deductee is a person who needs to pay the tax to the deductor.

TDS is applied on immovable properties, salary payment, interest on securities, dividends, payment of contracts etc. The Tax amount is decided per year by the government of India. The PAN number of the deductee needs to be given to the deductor for calculating the TDS.

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