Basic difference between Income Tax and TDS?

Still confused with Income Tax and TDS, fret not as here are some of the basic differences between Income Tax and TDS.

Income Tax

It is a mandatory tax paid by individual sand HUFs who have their income from various sources. It is a direct tax that goes directly from taxpayer to the government.

TDS

Tax Deducted at Source or TDS is a part of Income Tax that has already been paid by the taxpayer and it can be set off against income tax and balance the tax liability to be paid.

Major Differences

Annual Payment and Periodic Payment

Income tax is an annual tax it is deposited to the Government once in every year. On the other had TDS is a periodic tax which is paid in certain intervals.

Direct and Indirect

Income Tax is a direct tax as it is paid directly to the Government, if we talk about Tax Deducted at Source or TDS it is deposited to the employer by the employee after which the employer deposit’s it to the government.

Gross and Certain Income

Income Tax is levied on the entire income earned by a taxpayer for a particular financial year, whereas TDS is levied on a few people who are making certain prescribed payments.

Afterand Before Completion of the Financial Year

Income Tax is levied on the individuals or HUFs for the income they have earned from the certain prescribed tax limits for a particular time period after the completion of a financial year. The whole process of the deduction of tax at source is quite different from that of  income tax as the TDS is calculated and deducted even before the individual receives his/her income.

If the taxpayer has paid more tax than his/her liability, then in that case the taxpayer can claim tax refund.