Friends, you must have heard the name of Income Tax and TDS many times in your life, but do you know the difference between these two, both are important parts of the taxation system. Many people get confused between these two and do not understand how exactly they differ. Let's know the complete details about it

1. Income Tax

Income tax is a direct tax that the government levies from the income of individuals and businesses.

It is calculated on the basis of salary, business profits and capital gains.

The taxpayer is responsible for paying this tax while filing his income tax return.

2. TDS (Tax Deducted at Source)

TDS is a system in which the government levies advance tax directly from the source of income.

It acts as a withholding tax, where a certain amount is deducted before the income (salary, interest, rent, etc.) is deposited into your account.

The amount deducted is later adjusted while filing income tax return.

Key Differences

Income tax is paid by the taxpayer after the calculation of total income.

TDS is deducted at the time of earning itself, thereby giving the tax to the government in advance.