1. What Is TDS Percentage On Salary?

TDS (Tax Deducted at Source) percentage on salary refers to the amount of tax deducted by employers from employees' salaries based on applicable income tax slab rates. It is a method of collecting income tax in advance from the source of income itself.

2. How Does The Calculator Work?

The calculator uses the TDS percentage formula:

Where:

• \( Taxable Salary \) — The salary amount subject to taxation after all deductions and exemptions
• \( TDS Slab Rate \) — The applicable income tax rate percentage based on the tax slab

Explanation: The formula calculates the TDS amount as a percentage of the taxable salary based on the prescribed tax slab rate applicable to the employee's income level.

3. Importance Of TDS Calculation

Details: Accurate TDS calculation ensures proper tax compliance, prevents tax evasion, helps in systematic collection of taxes, and reduces the burden of lump-sum tax payment for employees at the end of the financial year.

4. Using The Calculator

Tips: Enter the taxable salary amount in your local currency and the applicable TDS slab rate as a percentage. Ensure both values are positive numbers with the slab rate between 0-100%.

5. Frequently Asked Questions (FAQ)

Q1: What is the difference between TDS and income tax?
A: TDS is tax deducted at source by the employer, while income tax is the total tax liability for the year. TDS is an advance payment of income tax.

Q2: How are TDS slab rates determined?
A: TDS slab rates are determined by the government's income tax department based on annual income brackets and are revised periodically in the budget.

Q3: Can I claim TDS refund?
A: Yes, if the total TDS deducted exceeds your actual tax liability, you can claim a refund by filing your income tax return.

Q4: What happens if TDS is not deducted?
A: If the employer fails to deduct TDS, they may be liable for penalties and interest. Employees may face scrutiny from tax authorities.

Q5: Are there any exemptions from TDS on salary?
A: Yes, certain allowances and deductions under sections like 80C, 80D, HRA, etc., can reduce taxable salary and consequently lower TDS liability.