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A TDS on salary calculator India resolves one of the most persistent frustrations for salaried employees: understanding exactly how much tax will be deducted from each paycheck before the money reaches your bank account. Enter your salary details and declared investments, and it estimates your annual tax liability, then divides that figure across the remaining months to show your monthly TDS. Whether you are negotiating a new job offer, planning your budget for the year, or verifying that your employer is deducting the correct amount, a TDS salary calculator removes the guesswork and gives you a figure you can rely on.
TDS on salary is tax deducted at source by your employer before the salary is credited to you. The legal basis sits under Section 192 of the Income Tax Act, 1961, for salary paid up to 31 March 2026. From 1 April 2026 onward, the corresponding provision is Section 392(1) of the Income Tax Act, 2025.[reference:0]The practical effect remains the same: your employer estimates your total taxable income for the financial year, applies eligible exemptions and deductions, computes your annual tax liability, and deducts the tax in monthly instalments rather than in a lump sum at year-end.
The logic behind this system is straightforward. Collecting tax gradually throughout the year prevents the burden of a large payment at the time of filing your income tax return. It also ensures the government receives a steady flow of revenue rather than a concentrated surge after the assessment year closes. For you as an employee, it means your take-home pay already accounts for your tax obligation, leaving no unpleasant surprises when the financial year ends.
The calculation follows a five-step sequence that your employer repeats at the start of each financial year, or whenever your salary structure changes mid-year.
A TDS on salary calculator automates this entire sequence. You enter your salary components and deductions, select your regime, and the calculator returns your monthly TDS figure along with a breakdown of the calculation.
The new tax regime is the default option for individual taxpayers. The slab rates for FY 2025-26 are structured to provide broad relief to middle-income earners.
| Income Range (₹) | Tax Rate |
|---|---|
| Up to 4,00,000 | Nil |
| 4,00,001 – 8,00,000 | 5% |
| 8,00,001 – 12,00,000 | 10% |
| 12,00,001 – 16,00,000 | 15% |
| 16,00,001 – 20,00,000 | 20% |
| 20,00,001 – 24,00,000 | 25% |
| Above 24,00,000 | 30% |
These slabs apply to your net taxable income after deducting the standard deduction and any other eligible deductions. A 4% health and education cess is added to the tax computed at these slab rates. Surcharge applies at 10% for income above ₹50 lakh, 15% above ₹1 crore, and 25% above ₹2 crore under the new regime.[reference:3]
Two provisions interact to determine whether you pay any tax at all under the new regime.
The standard deduction is ₹75,000 for salaried employees and pensioners under the new tax regime. It is granted automatically and requires no proof of expenditure or investment.[reference:4]Under the old regime, the standard deduction is ₹50,000.
The Section 87A rebate makes your tax liability zero if your net taxable income does not exceed ₹12 lakh under the new regime. The maximum rebate is ₹60,000, which fully offsets the tax payable on income up to that threshold. When you combine the ₹75,000 standard deduction with the ₹12 lakh rebate threshold, salaried individuals can earn up to ₹12.75 lakh without paying any income tax.[reference:5]
This means no TDS is deducted from your salary if your gross annual income falls at or below ₹12.75 lakh under the new regime. If your income exceeds this figure, the rebate does not apply and tax is calculated on the entire taxable income using the slab rates above.
The regime you choose directly affects your TDS deduction. The old regime offers a wider array of deductions that can substantially reduce your taxable income, but the slab rates are higher. The new regime offers lower slab rates and a higher standard deduction, but it disallows most deductions.
| Feature | Old Tax Regime | New Tax Regime |
|---|---|---|
| Basic exemption limit | ₹2.5 lakh | ₹4 lakh |
| Standard deduction | ₹50,000 | ₹75,000 |
| Section 80C (PF, ELSS, LIC) | Up to ₹1.5 lakh | Not allowed |
| Section 80D (Health insurance) | Allowed as per limits | Not allowed |
| HRA exemption | Allowed | Not allowed |
| Home loan interest (Section 24b) | Allowed | Not allowed |
| Employer NPS (80CCD(2)) | Allowed | Allowed |
| Section 87A rebate | Up to ₹12,500 (income up to ₹5 lakh) | Up to ₹60,000 (income up to ₹12 lakh) |
The practical rule of thumb is straightforward. If you claim significant deductions — a home loan, substantial Section 80C investments, health insurance premiums, and HRA — the old regime may lower your taxable income enough to offset its higher slab rates. If you prefer a simpler structure with fewer documentation requirements, the new regime's lower rates and higher standard deduction often produce a lower TDS figure. A income tax calculator can run both scenarios side by side so you can see the difference in rupees before making your declaration.
Consider an employee with a cost to company of ₹15 lakh. The salary structure includes basic salary, dearness allowance, and other components. Under the new tax regime, the calculation proceeds as follows.
| Particulars | Amount (₹) |
|---|---|
| Gross salary | 15,00,000 |
| Less: Standard deduction | 75,000 |
| Less: Employer NPS contribution (80CCD(2)) | 1,05,000 |
| Net taxable salary | 13,20,000 |
| Tax on ₹13,20,000 (new regime slabs) | 81,120 |
| TDS per month | 6,760 |
Under the old regime, the same employee might claim Section 80C investments of ₹1.5 lakh, Section 80D health insurance of ₹50,000, HRA exemption, and home loan interest. Those deductions could reduce taxable income to a point where the TDS is lower than the new regime figure. The table below compares the two outcomes for a similar salary structure.
| Particulars | Old Regime (₹) | New Regime (₹) |
|---|---|---|
| Gross salary | 15,00,000 | 15,00,000 |
| Standard deduction | 50,000 | 75,000 |
| Other deductions | 4,88,000 | 1,05,000 |
| Net taxable salary | 9,62,000 | 13,20,000 |
| Annual tax liability | 1,12,840 | 81,120 |
| Monthly TDS | 9,403 | 6,760 |
In this example, the new regime produces a lower TDS because the deductions claimed under the old regime are not large enough to offset its higher slab rates. For employees with a home loan and substantial Section 80C investments, the old regime may swing the other way. The TDS calculator lets you model both scenarios with your actual figures.
Your employer can only deduct the correct TDS if you provide accurate information at the start of the financial year. The declaration process typically involves submitting investment proofs, rent receipts, and a tax regime choice.
At the end of the year, your employer reconciles the actual investments you made against your declaration. If you invested less than declared, the excess TDS deducted may result in a refund when you file your income tax return. If you invested more, you may owe additional tax.
Your employer deducts TDS from your salary each month at the time of payment. The deducted amount must be deposited with the central government by the 7th of the following month. For TDS deducted in March, the deposit deadline is 30 April.
Your employer issues a TDS certificate annually. For salary income, this is Form 130 under the Income Tax Act, 2025, replacing the earlier Form 16.[reference:6]Form 130 summarises your gross salary, deductions claimed, taxable income, and the total TDS deducted during the year. You use this document to file your income tax return. If the TDS deducted exceeds your final tax liability, you claim a refund. If it falls short, you pay the difference.
Several recurring errors cause employees to either overpay TDS during the year or face an unexpected tax demand at filing time.
TDS on salary is tax deducted at source by your employer before paying your monthly salary. Under Section 192 of the Income Tax Act, every employer who pays taxable salary is required to estimate your annual tax liability, deduct tax each month, and deposit it with the government. The deduction is based on your estimated annual income and the tax regime you choose.
TDS on salary is calculated in five steps. First, your employer estimates your gross annual salary. Second, they apply eligible exemptions and deductions based on your chosen tax regime. Third, they compute your net taxable income. Fourth, they calculate your annual tax liability using slab rates, add surcharge and cess, and subtract any rebate. Finally, they divide the total annual tax by the remaining months in the financial year to determine your monthly TDS.
No TDS is deducted if your annual income is below the taxable limit. Under the new tax regime for FY 2025-26, the basic exemption limit is ₹4 lakh. With the standard deduction of ₹75,000 and the Section 87A rebate, salaried individuals can earn up to ₹12.75 lakh without paying any tax. Under the old tax regime, the basic exemption limit is ₹2.5 lakh.
For FY 2025-26 under the new tax regime, income up to ₹4 lakh is exempt. Income from ₹4,00,001 to ₹8,00,000 is taxed at 5%. ₹8,00,001 to ₹12,00,000 is taxed at 10%. ₹12,00,001 to ₹16,00,000 is taxed at 15%. ₹16,00,001 to ₹20,00,000 is taxed at 20%. ₹20,00,001 to ₹24,00,000 is taxed at 25%. Income above ₹24,00,000 is taxed at 30%. A 4% health and education cess applies on the total tax.
The standard deduction is ₹75,000 under the new tax regime and ₹50,000 under the old tax regime for FY 2025-26. It is available without any proof of investment or expenditure. This deduction directly reduces your taxable salary income. For example, if your salary income is ₹15 lakh, your taxable income becomes ₹14.25 lakh after claiming the ₹75,000 standard deduction under the new regime.
Under the new tax regime, the Section 87A rebate provides a maximum benefit of ₹60,000. If your net taxable income does not exceed ₹12 lakh, the rebate makes your tax liability zero. For salaried individuals, the standard deduction of ₹75,000 extends this zero-tax threshold to ₹12.75 lakh. This means no TDS is deducted if your annual salary income is at or below this limit.
The old tax regime allows a wider range of deductions like Section 80C up to ₹1.5 lakh, Section 80D for health insurance, HRA exemption, and home loan interest under Section 24(b). The new tax regime offers lower slab rates but disallows most of these deductions except the standard deduction and employer NPS contribution under Section 80CCD(2). You must choose one regime at the start of the year for TDS calculation.
TDS is deducted at the time of every salary payment, typically each month. Your employer deposits the deducted amount with the central government by the 7th of the following month. For March deductions, the deadline is 30 April. Your employer issues Form 130 (previously Form 16) annually, summarising your salary and TDS deducted, which you use to file your income tax return.
Salaried employees can choose between the old and new tax regimes at the start of each financial year. Your employer calculates TDS based on the regime you declare. If you have substantial deductions like home loan interest, Section 80C investments, or HRA claims, the old regime may reduce your TDS. If you prefer a simpler structure with lower slab rates and fewer paperwork requirements, the new regime is the default option. You can switch regimes when filing your ITR if your circumstances change.
In sum, a TDS on salary calculator India gives you the visibility you need to plan your finances with confidence. Whether you are checking whether your employer is deducting the correct monthly amount, comparing the old and new tax regimes to see which one leaves more in your hand, or simply trying to understand why your take-home pay changes when your salary structure does, the calculator turns a complex statutory process into a clear, actionable figure. Use the TDS calculator above, enter your actual salary components and declared investments, and treat the result as what it is: a precise estimate of the tax your employer will deduct from each paycheck, calculated the same way the payroll department does it.