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TDS is the acronym for tax deducted at source. According to the Income Tax Act, the individuals are ought to pay taxes at the time of making payments. So, the tax is deducted at the source at the set rates.

This means that instead of deducting the tax from your income later, the government prefers to deduct the tax beforehand from the source. TDS is deducted by an authorised deductor and then deposited to the IT department.

TDS deduction rate on the salary ranges between 10% to 30% depending on the tax slab at which the income of a person falls.