How is TDS on salary calculated?

Employers calculate annual taxable income after exemptions (standard deduction, HRA, 80C, 80D), compute total annual income tax based on declared tax regime, and divide by 12 to deduct monthly TDS.

Is standard deduction available under New Tax Regime for TDS?

Yes, a standard deduction of ₹75,000 is automatically subtracted under the New Tax Regime for FY 2026-27 (AY 2027-28).

When does employer start deducting TDS on salary?

Employers start deducting TDS if your estimated annual taxable income exceeds the basic exemption limit. If income is under ₹7,00,000 (New Regime) or ₹5,00,000 (Old Regime), Section 87A rebate reduces tax to zero.

What is Form 16 and how is it related to TDS on salary?

Form 16 is an annual TDS certificate issued by employers by June 15 following the end of the financial year. It provides a complete breakdown of total salary paid, tax deductions claimed, and total TDS deposited with the Income Tax Department.

Can excess TDS deducted on salary be refunded?

Yes! If excess TDS was deducted (for instance, if you submitted tax-saving investment proofs late), you can claim a full refund along with interest by filing your Income Tax Return (ITR-1 / ITR-2) on the IT Portal.

Which tax regime is chosen by default for salary TDS if I do not intimate my employer?

Starting FY 2023-24 onwards, the New Tax Regime is the default tax regime under Section 115BAC. If you do not formally communicate your choice to your employer, TDS will automatically be deducted according to the New Tax Regime slabs.

TDS Calculator on Salary 2026

Calculate monthly TDS deductions from your salary slip and net in-hand bank payout under Old vs New Regime.

Income Tax Regime Choice

Quick CTC Presets:

Annual CTC / Salary Income

₹

₹0₹3.00 Cr

Standard Deduction: ₹75,000

Auto-Applied

MONTHLY SALARY TDS (NEW REGIME)Sec 192

Monthly TDS Deduction

₹10,833/ month

Deducted monthly by employer based on annual tax liability of ₹1.30 L.

Net Monthly Take-Home Bank Deposit

₹1.14 L/ month

Total Annual Tax Liability₹1.30 L

Net Taxable Income₹14.25 L

Standard Deduction₹75,000

Annual Gross CTC₹15.00 L

Form 16 will reflect total annual salary, deductions, and TDS deposited under TAN of employer.

Tax Calculation Bridge

Annual CTC / Salary Income:₹15.00 L

Standard Deduction:−₹75,000

Net Taxable Income:₹14.25 L

Total Annual Tax Liability:₹1.30 L

Monthly TDS Deduction:₹10,833

Monthly Salary Payout Distribution

Monthly In-Hand Bank Credit₹1.14 L

Monthly TDS Withheld₹10,833

TDS on Salary Formula & Live Calculation

Standard Formula

Monthly TDS = Total Estimated Annual Tax / 12

Live Calculation (Plugging Your Values)

Annual Salary / CTC (CTC):₹15.00 L

Tax Regime (R):New Tax Regime (Default)

Standard Deduction (SD):₹75,000

Net Taxable Income (TI):₹14.25 L

Total Annual Tax Liability (AT):₹1.30 L

Substituted Equation:

Monthly TDS = ₹1.30 L / 12 = ₹10,833

Net Monthly Take-Home Bank Deposit:₹1.14 L

Under Section 192 of the Income Tax Act, employers are required to estimate your annual tax liability at the beginning of the financial year based on your declared tax regime and deductions, and deduct TDS in equal monthly installments (Total Annual Tax / 12).

TDS on Salary FAQs

Under Section 192, your employer projects your gross salary for the entire financial year, subtracts applicable deductions (standard deduction, HRA, Section 80C/80D under Old Regime), calculates income tax according to the active slab rates, and divides the total annual tax by 12 to compute monthly TDS.