A business example
For a payment already assessed as subject to withholding, assume a ₹40,000 amount and a correctly determined ₹4,000 deduction solely to demonstrate the money movement.
Amount payable
₹40,000 is the amount before the assumed deduction.
Recipient receives
₹36,000 is paid to the recipient.
Tax accounted for
₹4,000 is withheld and must be handled through the applicable deposit and reporting process.
What this shows
₹36,000 plus ₹4,000 explains the ₹40,000 settlement. The assumed deduction is not a rate recommendation or a calculation of the recipient's final tax.
What it is often confused with
TDS is not an extra service charge and is not necessarily the recipient's final tax liability.
What to look at in your business
Connect the payment classification, deduction, deposit and certificate records.
Context and further reading
Income Tax Department: TAN details. This reference supports the terminology; use the linked guide for applicability and operative requirements.
Kosha.Services · Updated 2 October 2026