TDS on salary has no fixed percentage: under section 192 your employer estimates your taxable salary for the whole year, works out the tax at your slab rates after rebate and cess, and deducts it in roughly equal parts each month. If your yearly tax comes to nil, as it does for salary up to ₹12.75 lakh in the new regime, no TDS is cut at all.
Section 192 governs salary for FY 2025-26. For salary paid from 1 April 2026, section 392 of the Income-tax Act, 2025 places the same duty on the employer, while Form 130 replaces Form 16. TDS on other payments to you, such as interest or rent, is covered in what TDS is.
Quick facts
Section
192 for FY 2025-26; 392 from tax year 2026-27Rate
Average of your slab tax, not a flat rateNo TDS if
Yearly tax is nil, for example salary up to ₹12.75 lakh in the new regimeDefault regime
New regime unless you tell the employer otherwiseProof of claims
Form 12BB for FY 2025-26; Form 124 from tax year 2026-27Return by employer
Form 24Q for FY 2025-26; Form 138 from tax year 2026-27Certificate
Form 16 for FY 2025-26; Form 130 from tax year 2026-27
How TDS on salary is calculated each month
The employer follows four steps, then repeats them whenever your pay or declarations change.
- Estimate gross salary for the year, including bonus and taxable allowances.
- Subtract what the chosen regime allows: the standard deduction (₹75,000 new, ₹50,000 old) and, in the old regime, the HRA, 80C, 80D and housing loan interest figures you have declared.
- Work out tax on the result at slab rates, take off the 87A rebate if it applies, and add 4% cess (and surcharge on very high pay).
- Divide what is still to be deducted by the months left in the year.
To test your own figures, the income tax calculator on this site works as a tds on salary calculator for the yearly figure. TDS deduction on salary often rises in the last quarter: proofs that fail, or a bonus, push the yearly figure up and the balance is spread over fewer months.
Salary TDS slab for FY 2025-26 under the new regime
| Taxable salary band | Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 to ₹8,00,000 | 5% |
| ₹8,00,001 to ₹12,00,000 | 10% |
| ₹12,00,001 to ₹16,00,000 | 15% |
| ₹16,00,001 to ₹20,00,000 | 20% |
| ₹20,00,001 to ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Taxable salary here means gross pay minus the ₹75,000 standard deduction. A resident's tax is fully rebated up to ₹12 lakh of taxable income, with marginal relief just above it. Old regime slabs and the age-based limits are on the old regime slabs page.
Worked example: how much TDS is deducted on salary per month
Rohan, new regime, salary ₹18,00,000 for FY 2025-26.
Taxable salary: ₹18,00,000 minus ₹75,000 = ₹17,25,000.
Tax: first ₹4 lakh, nil; slab ₹4 to 8 lakh, ₹20,000; slab ₹8 to 12 lakh, ₹40,000; slab ₹12 to 16 lakh, ₹60,000; balance taxed at 20% of ₹1,25,000 = ₹25,000. Total ₹1,45,000.
No rebate, as income is above ₹12 lakh. Cess at 4%: ₹5,800. Yearly tax ₹1,50,800.
Monthly TDS: ₹1,50,800 ÷ 12 = about ₹12,567, with the last month adjusted so the year adds up exactly.
Anjali, new regime, salary ₹12,00,000. Taxable ₹11,25,000. Tax before rebate: ₹20,000 + 10% of ₹3,25,000 = ₹52,500. The rebate of up to ₹60,000 covers it, so her TDS is nil.
What employees should give the employer
- Regime choice: if you stay silent, the employer computes TDS by the new regime. Tell the employer in writing at the start of the year if you want the old regime.
- Proofs: rent receipts, investment proofs and home loan certificates go with Form 12BB for FY 2025-26, and Form 124 from tax year 2026-27.
- Earlier job in the same year: share the salary and TDS from the previous employer, or both will give you the full slab benefit and you will owe tax at filing.
- Other income and TDS: you may ask the employer to take into account other income and TDS or TCS already suffered, so that salary TDS is not overdone.
Due dates and forms for salary TDS
| Duty | FY 2025-26 (section 192) | Tax year 2026-27 (section 392) |
|---|---|---|
| Deposit TDS | 7th of next month; 30 April for March | Same timeline |
| Quarterly statement | Form 24Q | Form 138 |
| Certificate to employee | Form 16 by 15 June | Form 130 |
| Employee's proof form | Form 12BB | Form 124 |
Late deposit attracts interest, and late statements a fee of ₹200 a day. These dates are on our TDS due dates page.
Partner salary is not TDS on salary
A partner's salary, bonus, commission or interest from the firm is not salary under section 192, because a partner is not an employee. From 1 April 2025, the firm deducts 10% under section 194T once such payments to a partner pass ₹20,000 in the year. For tax year 2026-27 this sits in section 393 alongside other non-salary items.
Salary TDS errors and fixes
| Problem | What helps |
|---|---|
| Too much TDS because proofs were late | Claim the deductions in your return and get the excess back as a refund |
| Too little TDS after a job change | Pay the shortfall as advance or self-assessment tax before filing |
| TDS in payslip missing from Form 26AS | Ask the employer to file or correct Form 24Q or Form 138 |
| Employer used the old regime by mistake | Choose the regime you want when you file the return; salaried people can switch each year |
This explains how salary TDS generally works in India and is not personal tax advice. Pay structures and rules differ; for your own figures, your chartered accountant or the official portal is the place to confirm.
Sources we checked
- Income-tax Act, 1961, section 192
- Income-tax Act, 2025, section 392
- Income-tax Act, 1961, section 194T
- Income-tax Act, 2025, section 156
Frequently asked questions
What is TDS in salary, and what is the full form?
TDS stands for tax deducted at source. In salary, it is income tax your employer deducts from your pay every month and deposits with the government on your behalf. It is credited against your final tax when you file your return.
What is the TDS rate on salary?
There is no single rate. The employer applies your slab rates to your estimated yearly taxable salary, then spreads the tax over the months.
Is there a salary TDS limit below which nothing is deducted?
Yes, in effect. If your yearly tax works out to nil, no TDS is due. In the new regime that covers salary up to ₹12.75 lakh for a resident.
What is the new section for TDS on salary?
From 1 April 2026, section 392 of the 2025 Act is the home of salary TDS. Section 192 of the Income Tax Act, 1961 still governs salary of FY 2025-26.
How to get a TDS refund on salary?
File your income tax return and claim all deductions and the TDS shown in Form 26AS. If TDS is more than your tax, the excess is refunded after processing. See our TDS refund guide.