TDS basics: deductor, deductee and tax credits

TDS is a way of collecting tax at the time certain payments are made. The payer deducts tax before paying and deposits it with the government. Common examples include salary, interest, rent and professional fees, depending on the rules in force.

This guide does not state rates or applicability limits. These depend on the payment type and current law and should be verified on official sources.

Two parties are involved in every TDS transaction, and each has a different role.

• Deductor: deducts tax, deposits it with the government, files TDS statements and issues certificates, where applicable
• Deductee: receives the payment net of tax and may claim credit for the tax deducted
• Deductors generally use a TAN; deductees are identified by PAN

A TDS certificate shows the payment made and the tax deducted. Tax credits linked to your PAN also appear in annual tax statements available on the official portal.

Certificates and portal statements should match. Credit depends on the deductor depositing the tax and filing statements correctly, so differences generally need to be raised with the deductor.

TDS statements, certificates and related correction services are handled through official systems maintained by the Income Tax Department, including TRACES where applicable. Corrections are made by the deductor through the official process.

CareAll can help deductees review certificates and tax credit information, and help deductors understand their general TDS responsibilities. CareAll cannot change tax credit records, and submitting an enquiry on this website does not file any statement or return.