Income Tax vs TDS: Half of India does not know what is the big difference between Income Tax and TDS...
Income Tax and TDS: People often start sweating on hearing the name of tax and when it comes to income tax and TDS, the confusion increases further. Are these two the same? Or are they different? So let's try to understand this 'tax riddle' today.
Is income tax a tax?
Everyone must have heard the name of income tax, as is clear from its name, it is a tax levied on your annual income. It is levied on your salary, profits from business, house rent, income from investment, etc. Income tax is a direct tax, meaning you deposit it directly to the government.
What is TDS?
TDS means 'tax deduction at source'. TDS means that even before you get your full income, a part of the tax is deducted from the place from where you are getting the money (like your company, bank, etc.) and deposited with the government. It is also a method of tax collection.
Difference between Income Tax Vs TDS
Income tax is paid by you on your total income. Whereas TDS is deducted by the person who pays your income (eg. the company). Whereas income tax is calculated on your total income at the end of the year TDS is deducted at the time of earning. Apart from this, income tax is a type of tax but TDS is considered a way of depositing tax.
Purpose of deducting TDS
The government also gets TDS deducted so that it gets tax from your income on time and you are not able to evade tax in any way. By the way, for the taxpayers also the burden of paying a large amount as tax at once is reduced, because a little tax has already been deducted from salary etc.
Deduction of TDS does not mean 'final tax'
Often people do not understand what TDS means. Deduction of TDS is only an advance tax payment, so at the end of the year, you have to calculate income tax on your total income and also file an income tax return.
Role of TDS in ITR
So let us tell you that when you file ITR, then it tells you what is your total income and how much tax is due on it. But if the tax filer wants, he can tell how much of your TDS has already been deducted, but if the tax is more than TDS, then you have to deposit the remaining tax. Apart from this, if more TDS is deducted then the tax will be less and you will get a refund.
Information is confirmed, the source is the government!
By the way, if you want all the official and detailed information related to income tax and TDS, then you should always get the information by visiting the Income Tax India website (www.incometax.gov.in). We are telling you all the rules here, so if you find any wrong information, always trust the authentic source.
Disclaimer: This content has been sourced and edited from News 18 hindi. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
