TDS, also known as Tax Deducted at Source, is a tax that a person or business entity deducts at the time of making specified payments such as salary, commission, interest, professional fees, rent, etc. Here, the person or business entity who deducts the TDS has to deposit the TDS amount with the Government.
In addition, the person from whom TDS has been deducted (Deductee) can obtain a refund if their tax payment liability is less than the deducted TDS amount. The concept of TDS was introduced to collect tax from the very source of income.
As per Income Tax laws, any person who has deducted TDS or is liable to deduct TDS has to compulsorily file a TDS return providing information about the amount of TDS deducted, TDS Challan details, PAN of person/entity whose TDS has been deducted, etc.
In addition to periodical return filing, the TDS Deductor is also responsible for depositing the amount of TDS deducted every month to the Government. Moreover, TDS Returns should be generally filed under the guidance of a professional who shall have a good understanding of the Income tax laws and other provisions to avoid penalties and fines.