Let’s explore what TDS on salary is, how it’s calculated, and how you can benefit from using HR Calcy’s user-friendly calculator.
???? What is TDS on Salary?
TDS on salary is a form of advance tax where your employer deducts a specified amount from your monthly salary and submits it directly to the Income Tax Department on your behalf. This deduction is governed by Section 192 of the Income Tax Act, 1961.
The idea is simple: collect income tax at the very source, making it easier for the government to manage tax inflows and reducing the burden on employees at the end of the financial year.
???? How is TDS on Salary Calculated?
TDS isn’t just a flat rate deduction—it’s calculated based on your total income, applicable exemptions, deductions, and the chosen tax regime. Here's a simplified breakdown:
1. Calculate Gross Salary
Includes:
Basic Salary
House Rent Allowance (HRA)
Dearness Allowance (DA)
Special Allowances
Bonuses
Other income (e.g., rental income, interest)
2. Apply Exemptions (Section 10)
Some common exemptions include:
HRA Exemption (based on actual rent paid and city of residence)
Leave Travel Allowance (LTA) for domestic travel
Standard Deduction of ₹50,000 for all salaried employees
3. Add Other Income (if any)
Include income from:
House property (e.g., rent)
Interest from savings or fixed deposits
Dividends or capital gains
4. Deduct Investments & Expenses (Chapter VI-A)
Popular deductions:
Section 80C: PPF, EPF, ELSS, LIC premium, etc. (limit ₹1.5 lakh)
Section 80D: Health insurance premiums
Section 24(b): Interest on home loan (limit ₹2 lakh)
5. Compute Taxable Income
Gross Income – Exemptions – Deductions = Taxable Income
6. Apply Tax Slabs
Depending on whether you’ve chosen the Old Tax Regime or the New Tax Regime, apply the respective tax rates to compute your total tax liability.
7. Calculate Monthly TDS
Divide your annual tax liability by 12 to get the monthly TDS amount.
???? Why Use HR Calcy’s TDS on Salary Calculator?
Manually calculating TDS is prone to error. HR Calcy offers a smart, automated tool that simplifies this process. Here’s how it helps:
✅ Easy to Use
Just input your salary, exemptions, deductions, and other income sources.
✅ Choose Your Tax Regime
Compare the tax liability under both the Old and New Regime to make an informed choice.
✅ Accurate Estimates
Get a detailed monthly TDS deduction estimate without complex formulas or spreadsheets.
✅ Free and Instant
No need to sign up or pay—it's click here fast, free, and available 24/7.
???? Try it here: HR Calcy’s TDS on Salary Calculator
????️ Important Points for FY 2024-25
Standard Deduction: ₹50,000 applicable to all salaried individuals
New Tax Regime as Default: But you can opt for the old regime when filing
PAN Requirement: Ensure your PAN is updated with your employer to avoid higher TDS rates
Proof of Investments: Submit valid documents on time to avoid excess deduction
???? Common Mistakes to Avoid
Wrong Declarations: Over- or under-declaring your investments can skew your TDS
Missing Deductions: Not utilizing Sections 80C, 80D, or HRA benefits can cost you more
Ignoring Regime Selection: Choosing the wrong regime could result in paying more tax
???? Final Thoughts
Tax planning shouldn't be a headache. By understanding how TDS on salary works and using tools TDS on Salary Calculator like HR Calcy’s calculator, you can take control of your finances, avoid surprises during filing, and maximize your take-home salary.
Whether you’re an employee planning for the year or an employer managing payroll, this calculator ensures precision, compliance, and peace of mind.
Make smarter financial decisions today—start with accurate TDS calculations.
