Both Advance Tax and TDS (Tax Deducted at Source) help in tax collection, but they differ in who pays the tax and how it’s deducted.
Key Differences:
| Feature | Advance Tax | TDS (Tax Deducted at Source) |
| Who Pays? | Taxpayer directly (self-payment) | Deducted by the payer (employer, bank, client, etc.) |
| Applicability | Required for self-employed, business owners, and salaried individuals (if tax not fully covered by TDS) | Applied to salaries, interest, rent, professional fees, etc. |
| Payment Mode | Paid in installments as per IT rules | Deducted at the time of payment |
| Payment Frequency | Quarterly as per due dates | Monthly deduction by the payer |
| Threshold | If total tax liability exceeds ₹10,000 in a financial year | Applicable as per specific TDS slab rates |
| Rate of Tax | As per applicable income tax slab | TDS rates vary by type of income (e.g., 10% for FD interest, 1% for property sales) |
| Penalty for Non-Payment | Interest under Sections 234B & 234C | Interest & penalty under Sections 201 & 271C |
Advance Tax Payment Rules:
- Who needs to pay?
- Self-employed professionals
- Business owners
- Salaried individuals (if tax liability exceeds ₹10,000 after TDS deductions)
- Advance Tax Payment Due Dates (FY 2025-26)
| Installment | Due Date | Amount Payable |
| 1st Installment | 15th June 2025 | 15% of total tax liability |
| 2nd Installment | 15th September 2025 | 45% (cumulative) |
| 3rd Installment | 15th December 2025 | 75% (cumulative) |
| 4th Installment | 15th March 2026 | 100% of total tax liability |
TDS Payment Rules:
- Who deducts?
- Employers (on salary)
- Banks (on FD interest above ₹40,000 / ₹50,000 for senior citizens)
- Tenants (on rent above ₹50,000/month)
- Businesses (on payments to professionals, contractors, etc.)
- TDS Payment Due Date
- 7th of the following month (except March, which is 30th April)
- TDS Return Filing
- Quarterly returns must be filed:
- Q1: 31st July
- Q2: 31st October
- Q3: 31st January
- Q4: 31st May
- Quarterly returns must be filed:
