How to calculate TDS on salary?
TDS on salary is calculated under Section 192 of the Income Tax Act. The employer estimates your total annual income, deducts exemptions and deductions under Chapter VI-A (80C, 80D, etc.), calculates tax as per applicable income tax slabs, and deducts TDS evenly across the year. Our TDS calculator does this instantly: enter your monthly salary, select deductions, and get your monthly TDS amount.
What is the TDS rate for salary in 2026-27?
TDS on salary is not at a flat rate — it depends on the income tax slab you fall under. For FY 2026-27, the new tax regime slabs are: up to ₹3 lakh (nil), ₹3-7 lakh (5%), ₹7-10 lakh (10%), ₹10-12 lakh (15%), ₹12-15 lakh (20%), and above ₹15 lakh (30%). Under the old regime, exemption is ₹2.5 lakh, with 5% for ₹2.5-5 lakh, 20% for ₹5-10 lakh, and 30% for above ₹10 lakh.
Which section is TDS on salary deducted under?
TDS on salary is deducted under Section 192 of the Income Tax Act, 1961. The employer is responsible for calculating the total taxable salary, applying the correct tax slab rates, and deducting TDS each month. Other TDS sections include Section 194 (dividend), 194A (interest), 194C (contracts), 194H (commission), 194I (rent), and 194J (professional fees).
Can TDS be zero on salary?
Yes, TDS can be zero if your total income after deductions and exemptions is below the taxable limit — ₹2.5 lakh under old regime or ₹3 lakh under new regime. You can submit Form 12BB to your employer with investment declarations to reduce TDS. If your tax liability is zero after all deductions, no TDS will be deducted from your salary.
How to calculate TDS on rent (Section 194I)?
TDS on rent under Section 194I is deducted at 10% for rent exceeding ₹2,40,000 per year (₹20,000 per month). If the tenant is an individual or HUF not subject to tax audit, no TDS is required. For rent of plant and machinery, the rate is 2%. The TDS must be deposited within 30 days of the end of the month of deduction.
What is the TDS rate for professional fees (Section 194J)?
TDS under Section 194J for professional fees, technical services, royalty, and non-compete fees is deducted at 10%. This applies to payments to doctors, lawyers, engineers, architects, consultants, and other professionals. If the payee does not provide PAN, TDS is deducted at 20%. The threshold for deduction is ₹30,000 per annum.
How is TDS on salary calculated with Form 16?
Form 16 is the TDS certificate issued by your employer. It contains Part A (tax deducted & deposited) and Part B (salary details, deductions claimed, and tax computation). To verify TDS: check your gross salary from Part B, subtract standard deduction (₹50,000), subtract Chapter VI-A deductions (80C, 80D, etc.), calculate tax on the resulting amount, subtract any tax already deducted, and the remaining is your TDS.
What happens if TDS is not deducted?
If TDS is not deducted when required, the deductor is liable for: 1% interest per month on the TDS amount from the date it was deductible to the date of actual deduction. Additionally, under Section 271C, a penalty equal to the TDS amount may be levied. For the deductee, income without TDS must be reported in the ITR, and self-assessment tax must be paid.
How to check TDS deducted from salary?
You can check TDS deducted from your salary: 1) View Form 16 issued by your employer, 2) Log in to the Income Tax portal at incometax.gov.in and view Form 26AS, 3) Use the TDS statement in the TRACES portal, 4) Check your salary slip which shows monthly TDS deduction. Form 26AS reflects all TDS deducted on your PAN across all sources.
What is the difference between TDS and advance tax?
TDS is deducted by the payer (employer) before making payment to you, while advance tax is paid directly by you in installments. TDS is applicable when income exceeds the basic exemption limit and is deducted at source. Advance tax is paid by individuals with income from business, profession, capital gains, or rental income. Both are credited against your final tax liability when filing ITR.
Can I claim TDS refund?
Yes, if the total TDS deducted exceeds your actual tax liability, you can claim a refund by filing your Income Tax Return (ITR). The refund is processed by the Income Tax Department after verifying your return. To get a faster refund, ensure your PAN and bank account are linked with the IT portal, and file your return on time. Refunds are typically credited within 30-60 days of ITR processing.
What is TDS under Section 194C for contractors?
Under Section 194C, TDS is deducted on payments to contractors and subcontractors. For individuals/HUF: 1% if payment exceeds ₹30,000 per transaction or ₹1,00,000 annually. For others: 2%. TDS applies to works contracts, advertising contracts, and transportation contracts. No TDS if the contractor is a resident individual and payment is for personal purposes.
How to calculate TDS on FD interest (Section 194A)?
TDS on FD interest under Section 194A is deducted at 10% if the total interest paid by a bank exceeds ₹40,000 per year (₹50,000 for senior citizens). For post office deposits, TDS applies above ₹40,000. Submit Form 15G/15H if your total income is below the taxable limit to avoid TDS. For cooperative banks, the threshold is ₹40,000.
What is the TDS rate for NRI (Non-Resident Indian)?
For NRIs, TDS rates are generally higher. Under Section 195, TDS on salary is at slab rates, interest on NRO account is 30%, capital gains is 10-20%, and rent is 30%. NRIs can claim lower TDS by applying to the Assessing Officer under Section 197. TDS certificates for NRIs are issued in Form 16A. DTAA benefits may reduce TDS rates for NRIs from treaty countries.