What is the Meaning of TDS?
TDS (Tax Deducted at Source) is basically an amount, which is deducted from your payments—for example, your salary, rent, commission, or interest before you get that amount of money.
The amount deducted is given to the government on behalf of the taxpayer, which is you. That way, there can be no tax fraud, plus, it prevents the hectic procedure of calculating and paying the tax after the amount is received or the payment has been made.
Why is TDS Calculation Important?
TDS Calculation helps you determine the amount of tax that will be deducted from your payment in a very quick manner. All you have to do is enter the basic details required—for instance, who the payment is for, what type of transaction it is, and the payment amount.
The calculator will calculate it and show you your TDS amount.
If you wish to do it manually, you can do so using the following formula:
Average income tax rate = Income tax payable (based on your tax slab) / Total estimated income for the year
What is a TDS Calculator
TDS Calculator is an online tool that you can use to determine the amount of TDS you’ll be paying or will be deducting from your various income payment modes. The limits for the TDS and the taxpayer will differ depending on which payment type—so basically, this TDS calculator helps you figure out that amount. It’s based on the rules of the Income Tax Act, 1961.