TDS is deducted when you engage in certain transactions like selling a property, trading virtual digital assets, or making fixed deposit (FD) investment over a certain limit. When TDS is deducted, you have to file your income tax return (ITR) and either report the corresponding income for tax or request a tax refund. If you ignore it, the tax department might choose to take action against you.
If your total income is below Rs 2.5 lakh, you can claim this TDS amount back as a tax refund, but for that you need to file the ITR. If you're due a tax refund but haven't filed your ITR, it is unlikely that the tax department will take any action against you, but you are going to leave money on the table.
