1. What is TDS on Salary?

TDS (Tax Deducted at Source) on salary is the amount of income tax deducted by an employer from an employee's salary before paying it to them. It is governed by the Income Tax Act, 1961 in India.

2. How Does the Calculator Work?

The calculator uses the simple TDS formula:

Where:

• \( Salary \) — Annual salary in Indian Rupees (INR)
• \( Income\ Tax\ Rate \) — Applicable tax rate as a decimal (e.g., 0.10 for 10%)

Explanation: The calculation multiplies the annual salary by the applicable tax rate to determine the amount to be deducted as TDS.

3. Importance of TDS Calculation

Details: Accurate TDS calculation ensures compliance with tax laws, prevents underpayment or overpayment of taxes, and helps in proper financial planning for both employers and employees.

4. Using the Calculator

Tips: Enter your annual salary in INR and the applicable tax rate as a decimal (e.g., 0.30 for 30%). The calculator will show the TDS amount that should be deducted.

5. Frequently Asked Questions (FAQ)

Q1: How is the tax rate determined?
A: The tax rate depends on the income tax slabs applicable for the financial year as per Indian tax laws.

Q2: Are there any exemptions or deductions?
A: Yes, various exemptions (HRA, LTA) and deductions (80C, 80D) can reduce taxable income before TDS calculation.

Q3: When is TDS on salary deducted?
A: TDS is deducted every month by the employer at the time of salary payment.

Q4: What if too much TDS is deducted?
A: Excess TDS can be claimed as refund when filing income tax returns.

Q5: Is TDS the final tax liability?
A: No, TDS is an advance tax. Final tax liability is calculated when filing returns, considering all income sources.