Manesh just got his first salary. CTC: ₹10L. He expected ₹83K a month in his bank. But only ₹66K showed up. He stared at the payslip and counted three new villains: PF, professional tax, and a big one called TDS taking ₹3,900.
Don't panic, Manesh. That money isn't gone. Let's follow it.
- TDS = Tax Deducted at Source. The government's way of collecting income tax in real time, instead of waiting till year-end.
- Your employer takes a slice each month and deposits it as tax in your name. You don't lose it — it's pre-paid.
- At year-end, when you file ITR, the system tallies what you owed vs. what was already deposited. Difference = refund or balance due.
- Visible in Form 16 (employer-issued) and Form 26AS (government record).
The simple story
Imagine the government as a landlord. You pay rent (income tax) once a year — but the landlord doesn't trust you to save up for it. So instead, your employer (the broker) automatically takes a portion of your rent every month and gives it to the landlord. That's TDS.
You haven't "paid extra". You've pre-paid. At year-end, when you file your ITR, the system tallies up what you actually owed vs. what was already deposited. The difference = refund (excess) or balance due (shortfall).
Salary splits two ways. The TDS that goes to the government comes back to you at ITR-filing time if you've overpaid.
Who deducts TDS from your money?
Not just your employer. Several people / institutions cut TDS in various situations:
Your employer
On salary · Sec 192
Slab rate. Spread monthly. Shown in Form 16.
Your bank
On FD interest · Sec 194A
10% if FD interest > ₹40K/year (₹50K for seniors).
Your tenant
On rent > ₹50K/mo · Sec 194-IB
5% deducted by the tenant when paying you rent.
Your client
On freelance fees · Sec 194J
10% on professional/technical fees > ₹30K.
How much will your employer cut?
The HR / payroll team estimates your annual tax (based on the regime you picked + the investments you declared) and divides it across 12 months.
Example: Gross salary ₹10L, expected annual tax ₹46,800 (new regime) → roughly ₹3,900/month TDS. That's exactly what Manesh sees on his payslip.
Forgot to submit investment proofs early in the year? Your employer assumes ₹0 deductions, then realises in Feb that you've claimed ₹1.5L 80C. They cut a big TDS chunk in the last 2 months to catch up. Submit proofs by January to avoid the March squeeze.
How to get your TDS back (if you've overpaid)
TDS isn't a "tax". It's a deposit in your name. The whole skill of tax season is making sure every rupee deducted lands in your 26AS — and gets adjusted in your return.
Either your PAN was missing/wrong on the deductor's record, or they haven't filed their quarterly TDS return yet. Contact the deductor immediately. Without 26AS entry, you can't claim that money back. Wait 30–45 days after the quarter ends before raising a portal grievance.
Quick answers
Yes. File your ITR claiming the TDS. The system computes your actual tax, sees TDS already paid, and credits the difference back to your bank account. Usually within 1–4 weeks of e-verification.
If your total income is below the basic exemption (₹2.5L old / ₹3L new), submit Form 15G (Form 15H for seniors) to your bank. They'll stop deducting TDS on interest.
That's Section 194J. The TDS appears in your 26AS. While filing ITR-3 or ITR-4, you claim it against your computed business tax. Usually a big refund — because TDS often overshoots your actual liability after deductions.
You must pay advance tax quarterly to avoid interest under Sections 234B/234C. See our advance tax guide.
Yes. If TDS would exceed your final tax liability, apply for a lower-deduction certificate under Section 197. Useful for freelancers with heavy deductions.
Got a TDS mismatch?
We sort it out — chase the deductor, file corrections, claim your refund. Quick turnaround.