The Payer/ Deductor has to deduct TDS before making payment to a payee. TDS is deducted at a prescribed rate as per the applicable Income Tax Section. The applicability of the section depends on the type of payment made.


For example, a company making payment of professional fees needs to deduct TDS @ 10% under section 194J of the Income Tax Act. 


Now, the persons who are required to deduct or collect TDS on behalf of IT Department are required to apply for and obtain TAN. (Tax deduction/Tax collection Account Number). And once TAN is allotted they need to deduct the TDS on payments and file applicable TDS Return. 


Following are the entities who need to deduct TDS:


Company
Branch / Division of Company
Association of Person (AOP)
Association of Person (Trust)
Artificial Juridical Person
Body of Individuals
Individual/HUF
Firm
Central Government
State Government
Statutory body (Central Govt.)
Statutory body (State Govt.)
Autonomous body (Central Govt.)
Autonomous body (State Govt.)
Local Authority (Central Govt.)
Local Authority (State Govt.)