How is TDS calculated?

Employer estimates annual income, subtracts deductions, calculates tax using slab rates, and divides by 12 for monthly TDS.

What is Section 87A rebate?

Under new tax regime, taxable income up to Rs 12 lakhs gets a rebate making tax zero. Under old regime, the limit is Rs 5 lakhs.

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TDS on Salary Calculator

Calculate TDS on Your Salary

Estimate monthly TDS based on annual income and tax regime (FY 2025-26).

New Tax Regime Old Tax Regime

Annual Gross Salary (₹)

Deductions under 80C, 80D, etc. (₹)

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This is an estimate. Actual TDS depends on investment declarations submitted to your employer.

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Slabs

Income Tax Slabs FY 2025-26

New Tax Regime (Default)

Up to ₹4,00,000	Nil
₹4,00,001 - ₹8,00,000	5%
₹8,00,001 - ₹12,00,000	10%
₹12,00,001 - ₹16,00,000	15%
₹16,00,001 - ₹20,00,000	20%
₹20,00,001 - ₹24,00,000	25%
Above ₹24,00,000	30%

Standard deduction: ₹75,000. Rebate u/s 87A for income up to ₹12,00,000.

Old Tax Regime

Up to ₹2,50,000	Nil
₹2,50,001 - ₹5,00,000	5%
₹5,00,001 - ₹10,00,000	20%
Above ₹10,00,000	30%

Standard deduction: ₹50,000. Allows 80C, 80D, HRA, and other deductions.

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FAQ

Frequently Asked Questions

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? +

What is the rebate under Section 87A? +

How can I reduce my TDS deduction? +

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