There are several innovative measures to bring more income and people under the tax net. We often say these measures as efforts to widen the tax base. One such measure is the TDS or Tax Deducted at Source. The TDS is a tax deducted or paid at the site of the generation of income. TDS is especially applicable in the case of direct taxation. 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. Several types of earnings are taxed under TDS. These include: salaries, interest payments, payments made for commission and brokerage, fees for technical and professional services, including transportation and advertisement contracts and rent. It is the responsibility of the entity that make the payment to a particular individual or firm to deduct the tax at the source. The taxable amount is charged and paid on behalf of the income earner. In recent years, the collection from TDS is increasing. This indicate that TDS as a tax administration measure is efficient to bring revenues.
