TDS on Salary Calculator

TDS (Tax Deducted at Source) on salary is the income tax your employer deducts from your pay every month and deposits with the government on your behalf, under Section 192 of the Income Tax Act. Rather than paying all your tax in one lump sum at year-end, it's collected evenly across the 12 months of the financial year — which is why your monthly in-hand is lower than your gross salary.

Your employer calculates TDS by estimating your total annual salary, subtracting the standard deduction (₹75,000 under the new regime, ₹50,000 under the old) and any deductions you've declared, computing the income tax on the remaining taxable income using the slab rates, adding surcharge (for high incomes) and a 4% health and education cess, then dividing the total by 12.

For FY2026-27 under the new regime, income up to ₹12 lakh (taxable, after the ₹75,000 standard deduction) attracts zero tax thanks to the Section 87A rebate — so a salary up to roughly ₹12.75 lakh can have zero TDS. Above that, TDS rises progressively with the new-regime slabs (5% from ₹4–8 lakh, up to 30% above ₹24 lakh), with a surcharge added once taxable income crosses ₹50 lakh.

Worked example: a ₹20 lakh annual salary under the new regime has taxable income of ₹19.25 lakh after the ₹75,000 standard deduction. The income tax works out to about ₹1.92 lakh including cess — roughly ₹16,000 deducted as TDS every month. Declaring your investments and deductions to your employer early in the year reduces the TDS taken from each paycheck.

This calculator uses the FY2026-27 slabs from the Finance Act 2025 (Budget 2025), including the ₹60,000 Section 87A rebate, marginal relief, and the new-regime surcharge tiers. It assumes a taxpayer below 60 years of age.