TDS & Advance Tax

Pay-as-you-earn taxation

India collects much tax before the return is filed, through TDS and advance tax. Understanding these avoids interest and cash-flow surprises.

Tax Deducted at Source (TDS)

TDS requires the payer to deduct tax on certain payments — salary, interest, professional fees, rent — and deposit it with the government. The deductee gets credit reflected in Form 26AS. Common rates and thresholds apply (e.g., TDS on professional fees under Section 194J). A TDS certificate (Form 16/16A) documents the deduction.

Advance tax

If your total tax liability after TDS exceeds ₹10,000 in a year, you must pay advance tax in instalments (15 June, 15 Sept, 15 Dec, 15 March). Shortfalls attract interest under Sections 234B and 234C.

Reconciling at filing

At return time, you reconcile TDS and advance tax already paid against your computed liability, paying the balance (self-assessment tax) or claiming a refund. Keeping Form 26AS and AIS aligned with your records prevents mismatches and notices.