Withholding Tax in India: A Simple Guide by HCO & Co. Withholding tax in india is the tax directly deducted by an employee from the employer. This tax is being paid to the government as a part of the individual tax liability. After collecting the tax from the employees, this tax is paid to the central government. The amount of the tax is deducted based on the income of the individual for the past year. The payment of the person is categorized into various slabs. Whenever the person's income exceeds the minimum limit in that category, the person becomes liable to pay taxes. So to understand how much tax is liable to you, you must first understand the residential status categories. Visit here for more details: https://www.hcoca.com/understanding-the-concept-and-how-to-claim-to-withholding-tax-in-india.aspx