TDS on Salary
Income tax deduction from salaries
TDS on Salary
Calculation Method
- Estimate annual taxable income
- Apply tax regime (Old/New)
- Calculate annual tax
- Divide by remaining months
Tax Regimes
New Regime (Default from FY 2023-24):
- Lower rates, fewer exemptions
- Standard deduction Rs. 50,000
Old Regime:
- Higher rates, more exemptions
- HRA, 80C, 80D deductions
Investment Declarations
Collect from employees:
- 80C investments (PPF, ELSS, LIC)
- 80D (Health insurance)
- HRA rent receipts
- Home loan interest
Monthly TDS
Automatically calculated and:
- Shown in payslip
- Added to Form 24Q
- Tracked year-to-date