TDS on salary: how your employer deducts income tax every month
TDS on salary is the income tax your employer deducts under section 192 each month, computed by estimating your tax for the whole year and spreading it across the remaining months. It is why the income tax line on your payslip changes after a hike, a regime switch or a new investment declaration.
FY 2026-27 figures, rules verified 3 Sep 2026. Numbers assume basic at 40% of CTC, employer PF inside CTC and ₹2,400 professional tax unless stated.
At the start of the year you declare your regime and, under the old regime, the deductions you plan to claim. Payroll estimates annual tax on that basis and deducts one twelfth each month. Proofs submitted in January or February adjust the last few months.
Because the new regime is the default, payroll deducts on new-regime slabs unless you opt out. If you switch regimes at filing time, the difference is settled through the return.
The income tax calculator shows the monthly TDS for both regimes on your exact salary.
See the figure for your own salary on the in hand calculator.
Questions
Related terms
- Form 16 — Form 16 is the certificate your employer issues by 15 June each year showing the salary paid and the TDS deducted for the previous financial year.
- Standard deduction — The standard deduction is a flat amount removed from salary income before tax, with no proof required: ₹75,000 under the new regime and ₹50,000 under the old regime in FY 2026-27.
- In hand salary — In hand salary, also called take home or net salary, is the amount credited to your bank account each month after income tax, employee provident fund and professional tax are deducted from gross salary.