TDS on Salary Calculator — Section 192 for FY 2025–26

How to Use the TDS on Salary Calculator

Using this calculator is straightforward. Follow these steps to compute your monthly TDS deduction accurately for FY 2025-26:

Step 1 — Choose Your Tax Regime

Select either the New Tax Regime (default from FY 2023-24 onwards) or the Old Tax Regime. The New Regime offers lower slab rates but restricts most deductions. The Old Regime allows deductions under Chapter VI-A like 80C, 80D, HRA exemption, and home loan interest.

Step 2 — Enter Salary Details

Input your gross annual salary (total CTC components received as salary) and your basic salary plus DA (dearness allowance). If you chose the Old Regime, additional fields appear for HRA, rent paid, city type, and various deductions.

Step 3 — Add Deductions

For the Old Regime, enter your Section 80C investments (up to ₹1,50,000), health insurance premium under 80D, home loan interest under Section 24(b), and any other Chapter VI-A deductions. For both regimes, you can enter employer NPS contribution under Section 80CCD(2).

Step 4 — Click Calculate

The calculator computes your taxable income after all eligible deductions, applies the correct slab rates, adds surcharge and 4% health and education cess, and then applies the Section 87A rebate if applicable. You get a complete breakdown of your annual tax and the equivalent monthly TDS amount.

Understanding TDS on Salary — Section 192 of the Income Tax Act

Section 192 of the Income Tax Act, 1961 mandates that every employer paying salary to an employee must deduct income tax at source before making the payment. This is one of the oldest and most fundamental TDS provisions in the Indian tax framework, ensuring that the government receives a steady stream of tax revenue throughout the year rather than collecting it as a lump sum at year-end.

The employer acts as the deductor and is responsible for estimating the employee's total annual income, computing tax liability based on the applicable slab rates and regime, and deducting tax proportionally each month. The deducted amount is deposited with the government and reported through quarterly TDS returns in Form 24Q.

Key Provisions of Section 192

Under Section 192, the employer considers the salary payable during the financial year, along with any other income declared by the employee (such as house property income or interest income). The employee can also submit an investment declaration form early in the year, and the employer adjusts TDS accordingly. Proofs of investments must typically be submitted by January or February, after which the employer finalises TDS for the remaining months.

Section 192(2A) allows employees to request the employer to consider relief under Section 89(1) if they have received arrears or advance salary, which helps in avoiding excess TDS. Additionally, under Section 192(2B), the employee must furnish proof of savings or investment claims declared at the beginning of the year to the satisfaction of the employer.

Income Tax Slab Rates for FY 2025-26 (AY 2026-27)

Budget 2025 introduced significant changes to the New Tax Regime slab rates while keeping the Old Regime unchanged. Understanding these slabs is essential for accurate TDS calculation on salary income. Below are the complete slab structures for both regimes as published by the Central Board of Direct Taxes (CBDT).

New Tax Regime — Slab Rates (Section 115BAC)

Under the New Regime, the standard deduction is ₹75,000 for salaried individuals, and the Section 87A rebate of up to ₹60,000 is available for taxable income up to ₹12,00,000 — effectively making income up to ₹12,75,000 completely tax-free for salaried employees.

Old Tax Regime — Slab Rates

The Old Regime provides a standard deduction of ₹50,000 and allows comprehensive deductions under Chapter VI-A including Section 80C (₹1.5 lakh), 80D (medical insurance), 80E (education loan), HRA exemption, and home loan interest under Section 24(b). The Section 87A rebate of ₹12,500 applies for taxable income up to ₹5,00,000.

Surcharge Rates on Income Tax

An additional Health and Education Cess of 4% is applied on total tax inclusive of surcharge. Under the New Regime, the maximum surcharge for individual taxpayers is capped at 25%, regardless of income level.

TDS on Salary Calculation Formula

Understanding the step-by-step formula helps verify whether your employer is deducting the correct TDS amount each month. Here is the complete methodology used to compute TDS under Section 192:

Example — TDS Calculation for ₹15 Lakh Salary (New Regime)

Let us walk through a practical example of an employee earning ₹15,00,000 gross annual salary under the New Tax Regime for FY 2025-26.

Old Regime vs New Regime — Which Saves More TDS?

Choosing between the Old and New Tax Regime is one of the most important tax planning decisions for salaried individuals in India. The right choice depends on your income level, investment habits, and the deductions you can claim.

* Under the Old Regime, the effective tax-free limit can be higher if you maximise deductions. For instance, with ₹1.5L under 80C, ₹50K standard deduction, ₹25K under 80D, and ₹2L home loan interest, total deductions can reach ₹4.25 lakh.

TDS on Salary — Compliance Requirements for Employers

Employers have specific compliance obligations under Section 192 and related provisions. Understanding these requirements is critical for businesses to avoid penalties and interest charges under the Income Tax Act.

Employer Obligations Under Section 192

Every employer paying salary above the basic exemption limit must deduct TDS. The employer must obtain the employee's PAN, determine the applicable tax regime (New Regime is default unless the employee opts for Old), collect investment declarations, and compute monthly TDS. The deducted amount must be deposited with the government by the 7th of the following month (15th April for March deductions).

Form 24Q — Quarterly TDS Return

Employers must file Form 24Q every quarter through the TRACES portal. This return contains details of salary paid to each employee, deductions claimed, and TDS deducted. The Q4 return includes Annexure II with complete employee-wise salary details for the entire year, which forms the basis for Form 16 generation.

Form 16 — TDS Certificate

Under Section 203 of the Income Tax Act, employers must issue Form 16 to every employee by 15th June following the end of the financial year. Form 16 consists of Part A (TDS details from TRACES) and Part B (salary computation, deductions, and tax calculation). This document is essential for employees to file their income tax returns.

Penalties for Non-Compliance

Under Section 201, if an employer fails to deduct or deposit TDS, they are deemed an "assessee in default" and must pay the tax amount along with interest at 1% per month for non-deduction and 1.5% per month for late deposit. Section 271C imposes a penalty equal to the TDS amount not deducted. Late filing of Form 24Q attracts a fee under Section 234E of ₹200 per day, subject to the TDS amount.

Frequently Asked Questions About TDS on Salary