How monthly TDS on salary is worked out
Under Section 192, your employer must estimate your tax for the whole financial year and spread it across your pay cycles. The estimate is revised whenever something changes: a raise, a bonus, investment proofs, or a switch of regime. That is why TDS can jump in January to March even when your salary hasn't changed.
Example
Annual gross salary of ₹18 lakh under the new regime gives taxable income of ₹17.25 lakh and tax of ₹1,50,800 including cess. If ₹50,000 has been deducted by the end of October, the remaining ₹1,00,800 is spread over November to March, or ₹20,160 a month.
Keeping TDS accurate
- Tell your employer which regime you want at the start of the year; the default is the new regime.
- Submit old-regime investment proofs by the deadline your payroll team sets, usually January, or the deductions will be ignored for TDS.
- If you changed jobs mid-year, give the new employer your previous salary and TDS (Form 12B), otherwise both employers may apply the rebate and you could owe tax at filing time.
- Check Form 26AS and the AIS on the income tax portal to confirm the TDS was actually deposited.
Frequently asked questions
How does my employer decide TDS each month?
By estimating your annual tax from projected salary and declared deductions, subtracting TDS already deducted, and dividing by the remaining months.
Why did my TDS go up in the last quarter?
A bonus, a salary revision, missing investment proofs or a previous employer's income added late can all raise the remaining tax, which is then spread over fewer months.
What if too much TDS was deducted?
You get the excess back as a refund when you file your income tax return.
Is TDS deducted if my income is below ₹12 lakh?
Under the new regime, if your projected taxable income is within ₹12 lakh, the rebate brings tax to zero and no TDS should be deducted.