TDS, or Tax Deducted at Source, is a sort of tax levied by the Indian government that collects taxes on a ‘pay as you get’ basis. Taxes are taken from payments at the point of origin, such as a salary or a broker’s commission.
Before issuing a payment to an employee, the employer deducts taxes and deposits them with the government. The employer then issues Form 16 to its employees and Form 16B to other deductees, which acts as proof of tax payment.