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Tax Deduction at Source (TDS): Understanding the System, Challenges, and a Call for Reform Tax Deduction at Source (TDS) is a system under Indian tax laws where the payer deducts tax before making payments to the recipient. It ensures that the government collects taxes in advance, rather than waiting for individuals to pay their dues at the end of the year. While TDS helps in preventing tax evasion and ensuring regular revenue flow for the government, it has sparked debates due to its complexity and the burden it imposes on taxpayers. Recently, a Public Interest Litigation (PIL) has been filed in the Supreme Court seeking a review of this system, claiming it violates fundamental rights and disproportionately affects smaller earners. What is TDS? Under TDS, tax is deducted at the time of making payments such as salaries, contractual fees, rents, commissions, and other taxable income. The deducted amount is then deposited with the government and adjusted against the recipient’s tot...