TDSIncome Tax
Tax Deducted at Source
(TDS)
Definition
A mechanism where the payer deducts tax at the time of payment and deposits it directly with the government. If you pay a contractor, freelancer, or professional above certain thresholds, you must deduct TDS.
Why founders care
Failing to deduct or deposit TDS makes your company liable for the full TDS amount plus interest. Quarterly TDS returns must be filed even if you had no deductions that quarter.
Related terms
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