Advance tax liability: taxpayers with residual tax after TDS meeting the threshold must pay in instalments during the year. Liability to pay advance tax arises when a taxpayer's estimated tax liability after Tax Deducted at Source (TDS) for the year meets or exceeds the statutory threshold; such taxpayers, including individuals, firms and companies, must pay tax for the year in advance during the same financial year and in instalments. Individuals with only salary income are excluded because their tax is discharged by employer withholding (TDS).