Tax Deducted at Source (TDS) DeMystified TDS stands for tax deducted at source, it is also known as withholding taxes in many countries. As per the Income Tax Act, any company or person making a payment is required to deduct tax at source if the payment exceeds certain threshold limits. TDS has to be deducted at the rates prescribed by the tax department. From the perspective of the person response to make any payment , the required TDS amount is to be