What is TDS on salary? −
TDS (Tax Deducted at Source) on salary is the income tax your employer deducts from your monthly salary before paying you. The employer deposits this amount with the government on your behalf. The TDS amount depends on your annual income, deductions claimed, and the tax regime you choose.
How is TDS on salary calculated? −
Your employer estimates your total annual income, subtracts eligible deductions (under old regime) or standard deduction (under new regime), calculates the annual tax liability using applicable slab rates, and divides it by 12 to determine monthly TDS.
What is the difference between old and new tax regime? −
The new tax regime (default from FY 2023-24) offers lower tax rates but fewer deductions. The old regime allows deductions like 80C (up to ₹1.5 lakhs), 80D (health insurance), HRA exemption, and more. Choose the regime that results in lower tax for your situation.
Can I change my tax regime during the year? +
Salaried employees can inform their employer about their preferred tax regime at the beginning of the financial year. You can switch between old and new regime at the time of filing your income tax return.
What is the rebate under Section 87A? +
Under the new tax regime, if your total taxable income is up to ₹12,00,000, you get a rebate under Section 87A that effectively makes your tax liability zero. Under the old regime, the rebate applies for income up to ₹5,00,000.
How can I reduce my TDS deduction? +
Under the old regime, submit investment declarations (80C, 80D, HRA, home loan) to your employer to reduce TDS. Under the new regime, deductions are limited, but the lower slab rates may still result in less tax. Consult a tax advisor for personalized advice.
