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The income tax payable is an annual amount i.e. the tax amount is payable for a financial year. Deduction of this income tax from the income paid to the employee is the responsibility of the employer. The employer needs to do this deduction. This deduction is termed as Tax Deducted at Source or TDS.

Usually, the employer will compute the total tax. From this tax, the amount of tax already paid will be deducted. The balance amount is divided by the number of remaining months in the financial year and the tax is deducted in equal installments. TDS comes under Income Tax deduction in the payslip of an employee.

 

 

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