How is TDS on salary calculated?

Your employer estimates your total income tax for the financial year based on your salary, the tax regime you declare, and any deductions you declare, then deducts roughly one-twelfth of that annual tax from each month’s salary. So monthly salary TDS is broadly your annual income tax divided by 12. This calculator computes your annual tax under the regime you pick — including the standard deduction, Section 87A rebate, and 4% cess — and divides it by twelve to estimate your monthly TDS.

Does the tax regime change my TDS?

Yes, significantly. Under the new regime (the default), your employer ignores almost all deductions, so TDS is computed on nearly your full salary after only the standard deduction. Under the old regime, any deductions you declare — 80C, 80D, HRA, home-loan interest — reduce your taxable salary and therefore your monthly TDS. Choosing the regime that produces less tax, and declaring it to your employer, directly raises your monthly take-home pay. Use the Income Tax Calculator to compare the two regimes for your salary.

Can I reduce the TDS deducted from my salary?

Yes, legitimately, by declaring your tax-saving investments and eligible deductions to your employer — ideally at the start of the financial year. Under the old regime, declared 80C investments, medical insurance, NPS, HRA, and home-loan interest all lower the taxable salary on which TDS is computed, reducing the monthly deduction. The earlier you declare, the more months the lower TDS is spread across. If you declare late, the employer adjusts the remaining months, and any excess already deducted comes back as a refund when you file.

Is the TDS amount my final tax?

Not necessarily. TDS is a prepayment estimate of your income tax, not the final settlement. When you file your return, your actual tax is computed on your total income from all sources; if the TDS deducted was more than your final tax, you get a refund, and if it was less, you pay the balance (sometimes with interest). For someone with only one salary and accurately declared deductions, TDS usually matches the final tax closely. Additional income, like interest or freelance earnings, can create a gap.

Why is no TDS deducted from my salary?

If your estimated annual tax is zero, there is no TDS to deduct. Under the new regime, a salaried person earning up to about ₹12.75 lakh pays no tax — the standard deduction plus the Section 87A rebate cancel it — so the employer deducts nothing. Under the old regime, income up to ₹5 lakh after deductions is similarly tax-free. This calculator will show zero monthly TDS in these cases. If you expect TDS but see none, check that your declared regime and deductions are correct.

Is my salary data stored anywhere?

No. The entire calculation runs in JavaScript inside your own browser. Nothing you enter — salary, regime, or deductions — is uploaded, logged, or stored on any server. The tool is free, needs no login, and closing the tab clears everything. The figures are informational estimates based on the FY 2025-26 slabs; your employer’s actual TDS may differ slightly based on perquisites and timing. For exact figures, check your Form 16 or consult a chartered accountant.

Tax

TDS Calculator

Estimate the TDS your employer deducts from your salary each month under the old or new regime for FY 2025-26. Free, in your browser, nothing uploaded.

By the Samastam teamLast updated 2026-06-20Editorial standards

Salary & regime

Annual salary (₹)

₹

The standard deduction is applied automatically. Enter gross salary before deductions.

Tax regime

The new regime ignores deductions. Switch to old to declare investments and HRA.

Your TDS

Enter your annual salary on the left. Your monthly TDS and annual tax appear here as you type.

A salary TDS calculator estimates the Tax Deducted at Source that your employer withholds from your pay each month. Employers spread your expected annual income tax across the twelve months of the financial year, so your monthly TDS is broadly your annual tax liability divided by twelve. Enter your annual salary, pick your tax regime, and — for the old regime — add your declared deductions, and this tool shows your full-year tax and the monthly TDS that follows from it for FY 2025-26 (AY 2026-27), including the Section 87A rebate and 4% cess. Everything runs in your browser, so nothing you enter is sent anywhere.

What this is and why it matters

Tax Deducted at Source on salary is the mechanism by which the government collects income tax as you earn rather than in one lump sum at year end. Your employer estimates your total tax for the financial year based on your salary and the regime and deductions you declare, then withholds roughly one-twelfth of it from each month’s pay and deposits it with the Income Tax Department on your behalf. The TDS shown on your payslip is therefore not a separate tax — it is a running prepayment of the same income tax you would otherwise compute at filing time.

Because TDS follows directly from your annual tax, the two big levers that change your income tax also change your monthly take-home pay. The first is the regime: under the default new regime your employer ignores almost all deductions, so TDS is computed on close to your full salary; under the old regime, any 80C investments, HRA exemption, or home-loan interest you declare shrink the taxable figure and so shrink the monthly deduction. The second is timing — declaring those deductions to your employer at the start of the year rather than the end means lower TDS spread across all twelve months, instead of a scramble for refunds later.

Estimating your TDS in advance is useful for exactly this planning. It tells you what monthly take-home to expect, reveals how much declaring your investments would raise that take-home, and flags whether too little is being deducted — which would leave a balance to pay at filing. It also makes the regime choice concrete: seeing the monthly rupee difference between old and new is often more motivating than an abstract annual figure, which is why this tool sits alongside the full Income Tax Calculator.

How to use this tool

Enter your annual salary. Type your gross annual salary before deductions. The calculator applies the standard deduction automatically (₹75,000 under the new regime, ₹50,000 under the old), so you do not subtract it yourself. The annual tax and the monthly TDS update together as you type, with nothing submitted anywhere.

Choose your tax regime. Pick the regime you have declared (or plan to declare) to your employer. The new regime is the default and ignores deductions; the old regime lets your declared deductions lower the tax and therefore the TDS. Switch between them to see the monthly difference directly.

Add your declared deductions (old regime). If you chose the old regime, enter the deductions you have declared to your employer — 80C up to ₹1.5 lakh, 80D medical insurance, ₹50,000 under 80CCD(1B) for NPS, home-loan interest up to ₹2 lakh, and your HRA exemption. These reduce the taxable salary on which TDS is computed. The new regime ignores them.

Read your monthly TDS. The result shows your estimated annual income tax and the monthly TDS (annual tax ÷ 12) your employer is likely to deduct. Use it to anticipate your take-home pay, to see how declaring deductions raises it, and to check that enough is being withheld so you are not left with a large balance at filing time.

Examples and use cases

A ₹12 lakh salary with no declared deductions

A salaried employee earning ₹12 lakh declares the new regime and no deductions. After the ₹75,000 standard deduction, taxable income is ₹11.25 lakh, which falls under the rebate threshold — so the annual tax is zero and the monthly TDS is also zero. The calculator shows that no tax is withheld, which is exactly why the new regime is attractive for salaries up to around ₹12.75 lakh with few deductions.

A ₹18 lakh salary under the new regime

An ₹18 lakh earner on the new regime has ₹17.25 lakh taxable after the standard deduction. The slab tax works out to roughly ₹1.85 lakh including 4% cess, so the monthly TDS is about ₹15,400 (₹1.85 lakh ÷ 12). The calculator shows both the annual figure and the monthly deduction, letting the employee see the take-home impact of every payslip at a glance.

How declaring deductions cuts monthly TDS

The same ₹18 lakh earner switches to the old regime and declares ₹1.5 lakh of 80C, ₹2 lakh of home-loan interest, and a ₹1.5 lakh HRA exemption — ₹5 lakh of deductions. Taxable income falls to around ₹12.5 lakh and the annual tax drops sharply, cutting the monthly TDS by several thousand rupees. The calculator makes the case for declaring investments early: the saving shows up in take-home pay every single month, not as a year-end refund.

Checking for under-deduction

An employee with multiple income sources notices the employer is deducting TDS only on the ₹10 lakh salary, ignoring ₹4 lakh of freelance income. Entering the full ₹14 lakh here shows the true annual tax and monthly TDS, which is higher than what the payslip deducts. Spotting this gap early lets the employee pay advance tax and avoid a large balance plus interest at filing time.

Frequently asked questions

How is TDS on salary calculated?: Your employer estimates your total income tax for the financial year based on your salary, the tax regime you declare, and any deductions you declare, then deducts roughly one-twelfth of that annual tax from each month’s salary. So monthly salary TDS is broadly your annual income tax divided by 12. This calculator computes your annual tax under the regime you pick — including the standard deduction, Section 87A rebate, and 4% cess — and divides it by twelve to estimate your monthly TDS.
Does the tax regime change my TDS?: Yes, significantly. Under the new regime (the default), your employer ignores almost all deductions, so TDS is computed on nearly your full salary after only the standard deduction. Under the old regime, any deductions you declare — 80C, 80D, HRA, home-loan interest — reduce your taxable salary and therefore your monthly TDS. Choosing the regime that produces less tax, and declaring it to your employer, directly raises your monthly take-home pay. Use the Income Tax Calculator to compare the two regimes for your salary.
Can I reduce the TDS deducted from my salary?: Yes, legitimately, by declaring your tax-saving investments and eligible deductions to your employer — ideally at the start of the financial year. Under the old regime, declared 80C investments, medical insurance, NPS, HRA, and home-loan interest all lower the taxable salary on which TDS is computed, reducing the monthly deduction. The earlier you declare, the more months the lower TDS is spread across. If you declare late, the employer adjusts the remaining months, and any excess already deducted comes back as a refund when you file.
Is the TDS amount my final tax?: Not necessarily. TDS is a prepayment estimate of your income tax, not the final settlement. When you file your return, your actual tax is computed on your total income from all sources; if the TDS deducted was more than your final tax, you get a refund, and if it was less, you pay the balance (sometimes with interest). For someone with only one salary and accurately declared deductions, TDS usually matches the final tax closely. Additional income, like interest or freelance earnings, can create a gap.
Why is no TDS deducted from my salary?: If your estimated annual tax is zero, there is no TDS to deduct. Under the new regime, a salaried person earning up to about ₹12.75 lakh pays no tax — the standard deduction plus the Section 87A rebate cancel it — so the employer deducts nothing. Under the old regime, income up to ₹5 lakh after deductions is similarly tax-free. This calculator will show zero monthly TDS in these cases. If you expect TDS but see none, check that your declared regime and deductions are correct.
Is my salary data stored anywhere?: No. The entire calculation runs in JavaScript inside your own browser. Nothing you enter — salary, regime, or deductions — is uploaded, logged, or stored on any server. The tool is free, needs no login, and closing the tab clears everything. The figures are informational estimates based on the FY 2025-26 slabs; your employer’s actual TDS may differ slightly based on perquisites and timing. For exact figures, check your Form 16 or consult a chartered accountant.