What is TDS?
TDS stands for Tax Deducted at Source and it is the tax which is paid in advance by person responsible for making payments in the form of salary, contract payment, dividends, etc. to Government as per income tax slab rate. Person deducting the tax is known as deductor and the person whose tax is being deducted is known as deductee. Recipient of income receives the net amount (after deducting TDS) which may be in the form of cash or cheque or credit in payee's account.
Payee does not need to pay tax if he gives investment proof to his employer for claiming deductions and his total taxable income is below taxable limit.
What is a TAN?
Person responsible for deducting TDS must apply for allotment of Taxpayer Identification Number (TAN) which is 10 digit alpha numeric numbers, within one month from the end of the month in which tax was deducted. Once it is issued it is valid for lifetime.
What is a TDS Return?
TDS return is a quarterly statement submitted to Income Tax Department and is required to be submitted by deductor. Return contains the details of TDS deducted and deposited by deductor, PAN of deductor and deductee, TDS challan information, etc. There are different TDS forms which are prescribed depending upon purpose of deducting TDS.