Tax Deduction Source is abbreviated as TDS which is a mean of collecting income tax in India. This tax deduction process is held under the Income Tax Act of 1961. This process is managed by Central Board of Direct Tax. Person deducting the tax is known as deductor and the person whose tax is being deducted is known as dedicatee. Recipient of income receives the net amount (after deducting TDS) which may be in the form of cash or cheque or credit in payee's account.
The payee does not need to pay tax if he gives investment proof to his employer for claiming deductions and his total taxable income.