How Much TDS Is Deducted on Salary Per Month?
How Much TDS Is Deducted on Salary Per Month?
TDS on Salary Explained for FY 2024–25 | AY 2025–26
If you're a salaried employee in India, you’ve probably noticed that your monthly salary is less than your CTC. That’s because your employer deducts TDS (Tax Deducted at Source) before crediting your salary.
But the big question is:
“How much TDS is deducted from salary every month?”
Let’s break it down in simple terms.
✅ What Is TDS on Salary?
TDS on salary is a tax withheld by your employer every month and deposited with the Income Tax Department on your behalf. It’s done as per Section 192 of the Income Tax Act, 1961.
This helps the government collect taxes in advance, and you, as a taxpayer, don’t need to worry about paying it in a lump sum later.
🧮 How Is Monthly TDS on Salary Calculated?
TDS on salary is not a fixed percentage. It is calculated based on:
1. Your total annual taxable income
2. Applicable tax regime (Old vs New)
3. Eligible deductions (80C, 80D, HRA, standard deduction, etc.)
4. Tax slab rates
5. Any rebates (e.g., Section 87A)
6. Investment declarations submitted to HR
Here's how employers calculate it:
1. Estimate your total income for the year (basic + allowances + bonus + benefits).
2. Subtract exemptions and declared deductions.
3. Apply the slab-wise tax rate (based on the chosen regime).
4. Divide the total tax liability by 12 = monthly TDS amount.
📘 Example: Monthly TDS on ₹10 Lakh Salary (FY 2024–25 – New Regime)
| Component | Amount (₹) |
| Gross Annual Salary | ₹10,00,000 |
| Less: Standard Deduction | ₹50,000 |
| Taxable Income | ₹9,50,000 |
Tax Calculation (New Regime):
• First ₹3L – Nil
• ₹3L–6L @ 5% = ₹15,000
• ₹6L–9L @ 10% = ₹30,000
• ₹9L–9.5L @ 15% = ₹7,500
Total Tax = ₹52,500 + 4% cess = ₹54,600
Monthly TDS = ₹54,600 ÷ 12 = ₹4,550 approx.
📊 What Are the TDS Slabs for FY 2024–25?
Under New Tax Regime (Default):
| Income Range | Tax Rate |
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 – ₹6,00,000 | 5% |
| ₹6,00,001 – ₹9,00,000 | 10% |
| ₹9,00,001 – ₹12,00,000 | 15% |
| ₹12,00,001 – ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
📌 Standard deduction of ₹50,000 is also applicable under this regime.
✅ What You Can Do to Reduce Monthly TDS
1. Submit investment proofs to HR (80C, 80D, NPS, home loan, etc.)
2. Opt for the Old Tax Regime if your deductions exceed ₹2.5–3L
3. Reclaim excess TDS while filing ITR, if actual investments differ from declared ones
4. Plan your salary components smartly (HRA, food coupons, NPS contributions)
❓When Does TDS Start?
TDS is generally deducted:
• From the first month of salary, if your projected income exceeds the exemption limit
• After adjusting for exemptions, deductions, and rebates (like 87A)
💡 If you change jobs mid-year, share your Form 12B with the new employer to avoid double TDS.
Final Words
The TDS on salary is not a fixed amount, but depends on your total annual taxable income, tax regime, and the investments you declare. With smart tax planning, you can minimize monthly TDS and improve your monthly cash flow.
