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Thank you for showing interest!<\/h3> We will get back to you shortly.<\/p><\/div><\/div><\/div>\n\n\n\n
How to calculate TDS on salary in 5 steps<\/h2>\n\n\n\n Your employer follows a set 5-step method, projecting your whole year and working back to a monthly number.<\/p>\n\n\n\n
Step 1:<\/strong> Estimate your yearly gross salary. Your employer adds up everything you will earn in the tax year, from April 1st to March 31st, including known bonuses and recurring allowances.<\/p>\n\n\n\nStep 2:<\/strong> Subtract the deductions and exemptions you qualify for.<\/p>\n\n\n\n\nA deduction is an amount the law lets you take off your income before tax, like the standard deduction or Section 80C investments (like employee provident fund, ELSS mutual funds).<\/li>\n\n\n\n An exemption is a part of your pay left out of tax from the start, such as House Rent Allowance (HRA).<\/li>\n<\/ul>\n\n\n\nUnder the new tax regime, this is mostly the flat \u20b975,000 standard deduction, with little else to claim. The old tax regime allows more, a \u20b950,000 standard deduction plus the HRA, Section 80C investments (like PPF, tax-saving instruments), health insurance, and home loan claims you declare through Form 124, the renamed Form 12BB under the Income Tax Act 2025.<\/p>\n\n\n\n
Step 3:<\/strong> Apply the slab rates of your chosen regime to the income that remains.<\/p>\n\n\n\nThe slab system works like a row of buckets. Your income fills them from the bottom up, and each bucket is taxed at its own rate.<\/p>\n\n\n\n
The first bucket is tax-free, the next is taxed at 5%, the one above at 10%, and so on. Only the income that spills into a higher bucket pays the higher rate, never your whole salary.<\/p>\n\n\n\n
Old tax regime slab rates for individuals below 60<\/strong><\/p>\n\n\nAnnual taxable income<\/strong><\/th>Tax rate<\/strong><\/th><\/tr><\/thead>Up to ₹2.5 lakh<\/td> Nil<\/td><\/tr> ₹2.5 lakh to ₹5 lakh<\/td> 5%<\/td><\/tr> ₹5 lakh to ₹10 lakh<\/td> 20%<\/td><\/tr> Above ₹10 lakh<\/td> 30%<\/td><\/tr><\/tbody><\/table>Source: Income Tax Department<\/em><\/figcaption><\/figure>\n\n\n\nScroll right to view full table \u2192<\/p>\n\n\n\n
New tax regime slab rates for the Year 2026-27<\/strong><\/p>\n\n\nAnnual taxable income<\/strong><\/th>Tax rate<\/strong><\/th><\/tr><\/thead>Up to ₹4 lakh<\/td> Nil<\/td><\/tr> ₹4 lakh to ₹8 lakh<\/td> 5%<\/td><\/tr> ₹8 lakh to ₹12 lakh<\/td> 10%<\/td><\/tr> ₹12 lakh to ₹16 lakh<\/td> 15%<\/td><\/tr> ₹16 lakh to ₹20 lakh<\/td> 20%<\/td><\/tr> ₹20 lakh to ₹24 lakh<\/td> 25%<\/td><\/tr> Above ₹24 lakh<\/td> 30%<\/td><\/tr><\/tbody><\/table>Source: Income Tax Department<\/em><\/figcaption><\/figure>\n\n\n\nScroll right to view full table \u2192<\/p>\n\n\n\n
Step 4:<\/strong> Add the rebate, any surcharge, and the cess.<\/p>\n\n\n\n\nThe Section 87A rebate cancels your tax fully if your taxable income stays within a fixed limit. Under the new tax regime that limit is \u20b912 lakh, where a rebate of up to \u20b960,000 ensures a zero tax liability. Under the old tax regime the limit is \u20b95 lakh, with a rebate of up to \u20b912,500.<\/li>\n\n\n\n A surcharge is an additional tax charged on your income tax liability, not on your income. It applies when your taxable income crosses specified limits, starting at 10% for income above \u20b950 lakh and rising up to 25%.<\/li>\n<\/ul>\n\n\n\nCurrent income tax surcharge brackets<\/strong><\/p>\n\n\nNet taxable income<\/th> Surcharge rate<\/th><\/tr><\/thead> ₹50 lakh to ₹1 crore<\/td> 10%<\/td><\/tr> ₹1 crore to ₹2 crore<\/td> 15%<\/td><\/tr> ₹2 crore to ₹5 crore<\/td> 25%<\/td><\/tr> Over ₹5 crore (Old tax regime)<\/td> 37%<\/td><\/tr> Over ₹5 crore (New tax regime)<\/td> 25%<\/td><\/tr><\/tbody><\/table>Source: Income Tax Department<\/em><\/figcaption><\/figure>\n\n\n\n\nA 4% health and education cess is added on the tax that remains. It is levied to fund public health and education programs. It\u2019s charged on the income tax you owe (including surcharges), raising dedicated funds for those sectors.<\/li>\n<\/ul>\n\n\n\nStep 5. <\/strong>Divide the year\u2019s tax across the months left. With a full year ahead, your monthly TDS is the yearly tax divided by 12. A mid-year joiner has it spread across the months from their joining date.<\/p>\n\n\n\nHow much TDS is deducted on salary per month<\/h2>\n\n\n\n Take an employee earning \u20b915 lakh in gross salary under the new tax regime. After the \u20b975,000 standard deduction, \u20b914,25,000 is taxable, and the new slabs produce a tax of \u20b993,750.<\/p>\n\n\n\n
How the \u20b915 lakh earner’s tax forms on taxable income of \u20b914,25,000<\/strong><\/p>\n\n\nSlab<\/strong><\/th>Income taxed in this band<\/strong><\/th>Rate<\/strong><\/th>Tax<\/strong><\/th><\/tr><\/thead>Up to ₹4 lakh<\/td> ₹4,00,000<\/td> Nil<\/td> ₹0<\/td><\/tr> ₹4 lakh to ₹8 lakh<\/td> ₹4,00,000<\/td> 5%<\/td> ₹20,000<\/td><\/tr> ₹8 lakh to ₹12 lakh<\/td> ₹4,00,000<\/td> 10%<\/td> ₹40,000<\/td><\/tr> ₹12 lakh to ₹14.25 lakh<\/td> ₹2,25,000<\/td> 15%<\/td> ₹33,750<\/td><\/tr> Total tax<\/td> <\/td> <\/td> ₹93,750<\/td><\/tr><\/tbody><\/table>Source: 1 Finance Research<\/em><\/figcaption><\/figure>\n\n\n\nScroll right to view full table \u2192<\/p>\n\n\n\n
Each band taxes only the income inside it. The first \u20b94 lakh draws nothing, the next two bands take 5% and 10%, and only the \u20b92,25,000 above \u20b912 lakh meets the 15% rate.<\/p>\n\n\n\n
A 4% cess on \u20b993,750 adds \u20b93,750, lifting the yearly tax to \u20b997,500. Divided across 12 months, it gives \u20b98,125, which gives your monthly TDS on salary.<\/p>\n\n\n\n
The TDS rate on salary runs on an average rate, and not the top slab. For this earner, that average works out to 6.5%, or \u20b997,500 against \u20b915 lakh.<\/p>\n\n\n\n
How to get TDS refund on salary<\/h2>\n\n\n\n Is TDS 100% refundable? It depends on your final tax for the year. If your TDS adds up to more than the tax you owe, the extra gets refunded once ITR filing is done.<\/p>\n\n\n\n
You file the ITR by July 31st after the tax year. It totals your real tax and sets it against the TDS already cut.<\/p>\n\n\n\n
You can check that TDS in your Form 130 and your Annual Information Statement (AIS) on the income tax portal. If the TDS was higher, the income tax department refunds the difference, usually within a few weeks.<\/p>\n\n\n\n
A nil tax means every rupee of TDS is refunded to you. When you do owe some tax and the TDS deducted was larger, only the surplus over your liability returns. The reverse leaves a balance to settle, since a tax higher than the TDS means you pay the shortfall at ITR filing.<\/p>\n\n\n\n
Consult a Qualified Financial Advisor<\/h2>\n\n\n\n Your TDS on salary turns on your regime, your deductions, and the slabs your income crosses. Income that never reaches your payslip, like interest, rent, or capital gains, still adds to your tax. So your TDS is only part of what you owe, and the rest shows up when you file your ITR.<\/p>\n\n\n\n
A Qualified Financial Advisor<\/a> builds the picture from your full income, not just your salary slip. They can tell you early whether to set aside advance tax or expect a refund. They also weigh the old tax regime against the new on your real numbers. A short conversation before the year ends turns your TDS from a surprise into a figure you planned for.<\/p>\n","protected":false},"excerpt":{"rendered":"From April 1st, 2026, the TDS on salary is governed by a new law, the Income Tax Act 2025. It replaces the Income Tax Act 1961, which had run for over 60 years. The tax rates and slabs are unchanged, but the forms, the section numbers, and the working behind your monthly deduction have all […]<\/p>\n","protected":false},"featured_media":7749,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":true,"_updated_date":""},"blog-category":[391,285],"acf":{"alt_text":"","hash_tags":"","spotify-id":"","show_audio_player":false,"audio_title":"","audio_link":"","key_takeaway":"","article_sources":""},"yoast_head":"\n
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