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Tax Deducted at Source or TDS is a method of tax collection of the government, also called pay as your earn or Withholding Tax. Persons who make payment of income are responsible to deduct tax at source and deposit this tax to the government within the time stipulated. The recipient of the income gets the net amount after deduction of TDS. The recipient of income is taxed on the gross income and amount deducted at source is allowed to be adjusted against the final tax liability.

In simple terms, gross income refers to your CTC and includes your basic pay, HRA, transport and other allowances. Net income refers to your in-hand salary.

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