TDS Calculator India FY 2025-26 — Free
Calculate Tax Deducted at Source (TDS) on your salary. Understand your monthly tax deductions and estimate your in-hand salary.
TDS Calculator
Basic + HRA + Allowances + Bonuses
TDS Calculation ResultsNo TDS
TDS Rate
₹0
0.00%
Threshold
₹0
No threshold
TDS Amount
₹0
Amount After TDS
₹5,00,000
Slab-wise Tax Breakdown
About this calculator
Understanding TDS (Tax Deducted at Source) on Salary
Tax Deducted at Source (TDS) is a mechanism introduced by the Income Tax Department to collect tax at the very source of income generation. For salaried individuals, this means employers are required to estimate the employee's annual tax liability and deduct a portion of that tax from their salary every month before paying it out.
Our TDS on Salary Calculator helps you estimate how much tax your employer will deduct from your monthly paycheck, allowing you to accurately forecast your in-hand salary.
How Employers Calculate TDS
The calculation of TDS on salary under Section 192 of the Income Tax Act involves several steps:
- Estimate Gross Annual Salary: Your employer calculates your total expected earnings for the financial year. This includes Basic Pay, DA, HRA, LTA, Special Allowances, and any bonuses.
- Allow Exemptions: Allowances like HRA (subject to limits), LTA, and Standard Deduction (₹50,000) are subtracted from the gross salary.
- Calculate Income from Other Sources: If you declare other income (like interest or rental income) or losses (like home loan interest under Section 24b) to your employer, they will factor this into your total taxable income.
- Apply Chapter VI-A Deductions: If you submit proof or declarations for investments under Section 80C (PPF, ELSS, EPF), 80D (Health Insurance), etc., these are deducted from your taxable income. (Note: This step is skipped if you choose the New Tax Regime).
- Compute Total Tax Liability: The final taxable income is subjected to the applicable income tax slab rates (Old or New Regime, whichever you have chosen).
- Calculate Monthly TDS: The total estimated annual tax liability is divided by 12 to arrive at the monthly TDS amount to be deducted from your paycheck.
Old Regime vs. New Regime for TDS
At the beginning of the financial year, your employer will ask you to choose between the Old Tax Regime and the New Tax Regime for the purpose of TDS deduction.
- New Tax Regime (Default): If you don't make a choice, the employer must deduct TDS according to the New Tax Regime. This regime has lower slab rates but does not allow deductions like 80C, 80D, or HRA.
- Old Tax Regime: If you inform your employer that you prefer the Old Regime, they will consider your investment proofs (80C, rent receipts for HRA) and calculate TDS based on the older, higher tax slabs.
Crucial Note: The choice you make with your employer for TDS is not final. You can switch regimes when you actually file your Income Tax Return (ITR) at the end of the year. If excess TDS was deducted, you will get a refund.
Form 16 and Form 26AS
- Form 16: This is the TDS certificate issued by your employer at the end of the financial year. It details the total salary paid to you and the total TDS deducted and deposited with the government.
- Form 26AS: This is your consolidated annual tax statement. You should check your Form 26AS on the Income Tax portal to ensure that the TDS deducted by your employer actually matches what has been deposited against your PAN.
Use our calculator to forecast your monthly TDS deductions. By inputting your salary details and planned investments, you can foresee exactly how your take-home pay will look throughout the year.
Formula
Income Tax Calculation Formula
Indian income tax uses progressive tax brackets:
Tax = Sum of (Income in bracket × Tax rate for bracket) - Deductions - Rebates
Tax Slab Calculation Steps
- Determine gross income
- Subtract deductions (80C, 80D, HRA, etc.)
- Calculate taxable income
- Apply applicable tax slabs
- Add cess (if applicable): 4% on tax amount
- Subtract applicable rebates/credits
TDS (Tax Deducted at Source)
TDS is advance tax deducted at the source of income:
TDS Amount = Gross Income × TDS Rate
TDS rates vary by income type:
- Salary: 10-30% (depends on income)
- Interest: 10% (banks deduct TDS on FD interest)
- Dividends: 20%
- Freelance income: 10-30%
Comparison & Examples
Income Tax Slabs (FY 2025-26) - Individuals Below 60 Years
| Income Range | Tax Rate | Tax on ₹5,00,000 Income |
|---|---|---|
| ₹0 - ₹3,00,000 | Nil | ₹0 |
| ₹3,00,001 - ₹7,50,000 | 5% | ₹11,250 |
| ₹7,50,001 - ₹12,50,000 | 20% | N/A |
| ₹12,50,001 - ₹20,00,000 | 30% | N/A |
| Above ₹20,00,000 | 45% | N/A |
Tax Deduction Limits (Section 80C)
| Deduction Type | Maximum Limit | Deductible Amount |
|---|---|---|
| Life Insurance Premium | ₹1,50,000 | ₹50,000 |
| PPF Contribution | ₹1,50,000 | ₹1,50,000 |
| ELSS Investment | ₹1,50,000 | ₹1,50,000 |
| Home Loan Principal | ₹1,50,000 | ₹1,25,000 |
| Tuition Fees | ₹1,50,000 | ₹50,000 |
| Total 80C Limit | ₹1,50,000 | ₹1,50,000 |
Frequently Asked Questions
How is TDS calculated on my salary?
Your employer estimates your total annual income, subtracts your declared tax-saving investments (like 80C, 80D, HRA), calculates your total tax liability for the year, and then deducts that amount in equal monthly installments from your salary. This is mandated under Section 192.
Can I stop my employer from deducting TDS?
You cannot completely stop your employer from deducting TDS if your income falls in a taxable bracket. However, you can significantly reduce your monthly TDS by declaring your tax-saving investments (like EPF, PPF, ELSS, Insurance) and submitting proofs in a timely manner.
What if my employer deducts more TDS than my actual tax liability?
If excess TDS has been deducted (e.g., if you made last-minute tax-saving investments that your employer didn't account for), you can claim a refund from the Income Tax Department when you file your Income Tax Return (ITR) at the end of the year.
What is Form 16 and when is it issued?
Form 16 is a certificate issued by your employer validating that TDS has been deducted from your salary and deposited with the government on your behalf. It contains a detailed breakdown of your salary, exemptions, deductions, and tax paid. Employers must issue it annually by June 15th of the following financial year.
Does TDS apply to annual bonuses and variable pay?
Yes, bonuses, variable pay, and performance incentives are considered part of your salary income. They are fully taxable as per your applicable income tax slab rate, and your employer will deduct TDS on these amounts before paying them out.
Can I claim a refund if I forgot to declare investments to my employer?
Yes! If you made tax-saving investments but failed to submit the proof to your employer in time, excess TDS will be deducted. You can claim this excess amount as a tax refund directly from the government when you file your Income Tax Return (ITR) by entering the correct investment details.
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Disclaimer
This calculator is provided for informational purposes only. It is not financial, investment, tax, or professional advice. Results are estimates based on the assumptions and inputs you provide. Always consult with a qualified financial advisor or tax professional before making any financial decisions. Past performance is not a guarantee of future results.
Sources & References
The figures, formulas, and guidance behind this TDS Calculator on Salary draw on authoritative primary sources. For verification and further reading:
- Income Tax Department, Government of India
- Reserve Bank of India
- Securities and Exchange Board of India
- Association of Mutual Funds in India
Frequently Asked Questions
What is TDS on salary and how is it calculated?
TDS (Tax Deducted at Source) on salary is the income tax that your employer deducts from your monthly pay and remits to the government on your behalf. The employer estimates your total annual taxable income at the start of the financial year, computes the applicable tax, and deducts it proportionately each month. This calculator replicates that logic — enter your salary components and deductions to see the estimated monthly TDS.
What inputs do I need to use this TDS calculator?
You typically need your gross annual salary (including basic pay, HRA, special allowances, and any other components), applicable exemptions (such as HRA exemption, LTA, standard deduction), and any declared investments under Chapter VI-A (like Section 80C, 80D). The tax is then computed on the net taxable income under either the old or new tax regime, whichever you choose.
What is the difference between the old and new tax regimes for TDS?
Under the old regime you can claim various exemptions and deductions (HRA, 80C, 80D, etc.) before computing tax. The new regime offers lower slab rates but most exemptions and deductions are not available. Your employer will deduct TDS based on whichever regime you declare at the start of the year; if you do not declare, the employer defaults to the new regime.
Can I reduce my TDS by submitting investment declarations?
Yes. By submitting proof of eligible investments and expenses to your employer — such as life insurance premiums, PPF contributions, home loan interest, and medical insurance premiums — you reduce your taxable income and therefore lower the TDS deducted each month. The calculator lets you enter these deductions to see the impact on your monthly TDS before you make declarations.
What happens if excess TDS has been deducted from my salary?
If TDS deducted exceeds your actual tax liability (for example, because you had additional deductions not declared to your employer), you can claim a refund when filing your Income Tax Return (ITR). The excess TDS will show in Form 26AS/AIS and will be credited back to your bank account after your return is processed by the Income Tax Department.
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