TDS and Advance Tax Explained

Common TDS Situations

Salary

Your employer estimates your annual tax and deducts a portion from each month's salary, based on your declared deductions and regime choice.

Fixed Deposit Interest

Banks deduct TDS on FD interest once it crosses a set annual threshold, usually at a flat rate — regardless of your actual income slab.

Property Sale

The buyer is typically required to deduct TDS before paying the seller, for property transactions above a certain value.

Professional Fees

Businesses paying freelancers or professionals above a threshold are required to deduct TDS before making the payment.

Advance Tax

If your total tax liability for the year (beyond what's already covered by TDS) exceeds ₹10,000, you're required to pay advance tax in instalments through the year, rather than one lump sum when filing. This commonly applies to freelancers, business owners, or those with large capital gains.

Due Date	Cumulative % Payable
By June 15	15%
By September 15	45%
By December 15	75%
By March 15	100%

💡 Missing these instalment deadlines can attract interest charges under the Income Tax Act, even if you eventually pay the full amount by year-end — the schedule itself matters, not just the total.

Getting a Refund

If TDS deducted through the year turns out to be more than your actual tax liability — common when banks deduct TDS on FD interest at a flat rate regardless of your slab — you can claim the difference back as a refund when filing your ITR.

A common scenario

If your total income falls in the 5% slab but the bank deducted flat TDS on your FD interest, filing your ITR gets you back the difference between what was deducted and what you actually owe

Frequently Asked Questions

Do salaried employees need to pay advance tax separately?⌄

Usually not, if your employer's TDS already covers your full salary-based liability. But if you have significant additional income — like capital gains, rental income, or interest — beyond what your employer accounts for, you may still owe advance tax on that portion.

How can I avoid TDS on FD interest if my income is below the taxable limit?⌄

You can submit Form 15G (or Form 15H for senior citizens) to the bank at the start of the financial year, declaring that your income is below the taxable threshold — this instructs the bank not to deduct TDS on your interest income.

How long does an income tax refund typically take?⌄

Refunds are usually processed within a few weeks to a couple of months after your ITR is filed and verified, credited directly to your bank account — though timelines can vary depending on the complexity of the return and any manual review needed.

What if I underpay my advance tax instalments?⌄

Underpaying against the required cumulative percentage by each due date typically attracts interest charges on the shortfall, calculated from the due date until the amount is actually paid.