TDS is deducted at source and credited to the government. You can claim TDS credit when filing ITR. Submit Form 15G/15H to avoid TDS if your total income is below the taxable limit.
TDS — Frequently Asked Questions
What is TDS and how does it work?+
TDS (Tax Deducted at Source) is a mechanism where the payer (employer, bank, tenant) deducts income tax before making payment and deposits it with the government. The recipient receives the net amount. TDS is credited against the recipient's income tax liability when they file their ITR. If TDS deducted exceeds your actual tax liability, you get a refund from the Income Tax Department.
How to avoid TDS on FD interest?+
Submit Form 15G (individuals below 60) or Form 15H (senior citizens 60+) to your bank at the start of each financial year. This form declares that your total income is below the taxable limit, requesting the bank not to deduct TDS. The form is valid for one financial year and must be resubmitted each year. Note: This is only valid if your actual total income is indeed below the taxable threshold — filing a false declaration is an offence.
What is the difference between TDS and advance tax?+
TDS is deducted by the payer on your behalf — you don't pay it yourself. Advance tax is self-assessment tax you pay directly to the government in instalments during the year. Both are credited against your total tax liability when filing ITR. If TDS + advance tax exceeds your actual liability, you get a refund. If it's less, you pay the balance as self-assessment tax.