TDS is a tax administration mechanism. TDS requires the income earners to pay the tax at the spot of income received. When the income is taxed at the source or at the site of its creation, it is ensured that those incomes which conventionally skips or escapes the tax base get reported and pay the tax. A number of provisions for deducting tax at source were made after 1991. At present, there around 25 types of income where TDS has to be paid. The deducted sum is required to be deposited to the credit of the Central Government.
