Tax Deducted at Source (TDS) is a system under which a specified percentage of tax is deducted from certain payments, such as salaries, interest, dividends, rent, or professional fees, before the recipient receives the amount. The deducted tax is deposited with the government on the recipient's behalf and can be claimed while filing the income tax return. Investors receiving dividend income from dividend stocks may be subject to TDS based on applicable tax regulations.
