The
difference between TDS and income tax is provided below. This will help you understand its purpose and their impact on your finances.
TDS Vs Income Tax
TDS (Tax Deducted at Source):
TDS is a system where tax is deducted at the source of income itself.
It is deducted by the payer of income (employer, bank, etc.) before making payment to the payee (employee, depositor, etc.).
The deducted amount is remitted to the government's account.
TDS is applicable to various types of payments such as salaries, interest, rent, professional fees, etc.
The rate of TDS varies depending on the nature of income and the provisions of the Income Tax Act.
:
Income tax is a direct tax imposed by the government on the income of individuals, firms, companies, etc.
It is calculated on the total income earned by an individual or entity during a financial year.
The taxpayer is required to calculate and pay income tax directly to the government by filing an income tax return.
Income tax rates vary based on the income slab in which the taxpayer falls. There are different tax slabs for individuals, Hindu Undivided Families (HUFs), firms, and companies.
:
TDS is deducted at the source of income, whereas income tax is calculated and paid by the taxpayer.
TDS is deducted by the payer, whereas income tax is paid by the taxpayer on their total income.
TDS is deducted throughout the year as and when income is earned, while income tax is typically paid annually after the end of the financial year.
TDS is deducted based on rates specified in the Income Tax Act, whereas income tax rates may vary based on the taxpayer's total income and applicable exemptions and deductions.
This is the
difference between TDS and income tax.
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What is Difference Between TDS and Income Tax?
shivam
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2024-03-29T14:01:48+00:00 2024-04-06T22:19:41+00:00Comment
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