TDS Salary Calculator for FY 2026–27
Estimate the tax your employer should deduct from each remaining salary payment. Add current and previous employer income, bonus, taxable benefits, declarations, tax already deducted and the payroll months left. The calculator compares the new and old tax regimes and prepares an annual TDS reconciliation.
Last updated: July 23, 2026. Tax Year: 1 April 2026 to 31 March 2027.
Salary TDS and Payroll Projection
Section 392(1), Income-tax Act, 2025. New regime is the payroll default unless you choose the old regime.
| Tax computation | New regime | Old regime |
|---|
| Step | Amount |
|---|
| Payroll | Planned TDS | Cumulative TDS including credits | Balance after payroll |
|---|
How to Use the TDS Salary Calculator
- Select the regime your employer will use. Keep the new regime if you have not chosen the old regime.
- Enter salary already paid and salary still expected from the current employer.
- Add bonus, arrears, taxable perquisites and salary received from a previous employer.
- Add other normal-rate income disclosed to payroll. Do not add capital gains, lottery winnings or other special-rate income here.
- Enter payroll-accepted deductions. The calculator applies the salary standard deduction automatically.
- Add TDS deducted by the current and previous employers, plus only those other credits the current employer will consider.
- Enter the payroll months left. Review the annual tax, balance TDS, comparison and monthly schedule.
How an Employer Calculates TDS on Salary
For salary paid from 1 April 2026, Section 392(1) of the Income-tax Act, 2025 requires the payer to deduct income tax at the time of payment. The employer uses the average income-tax rate on the employee’s estimated salary income for the full tax year. Salary TDS is therefore an annual projection collected through individual payroll payments, not a fixed percentage applied to every payslip.
The estimate changes during the year. A salary revision, bonus, arrears, taxable perquisite, job change, accepted declaration, rejected proof or corrected TDS credit can raise or lower the deduction in later months. Section 392 also permits specified information from another employer, other income, house-property loss, relief and tax deducted or collected elsewhere to affect the computation when the employee furnishes the required particulars.
Worked Salary TDS Example
The default example projects ₹15,00,000 of taxable salary before standard deduction. It includes ₹4,50,000 already paid, ₹9,00,000 still expected and a ₹1,50,000 bonus. Under the new regime, the ₹75,000 standard deduction reduces taxable income to ₹14,25,000.
- Slab tax before cess: ₹93,750
- Health and Education Cess at 4%: ₹3,750
- Annual tax: ₹97,500
- Current-employer TDS already deducted: ₹20,000
- Balance TDS: ₹77,500
- Eight remaining payroll months: about ₹9,688 per month
The old-regime comparison uses the declarations entered in the form. It does not assume that every offered benefit or investment qualifies. Proof and statutory conditions still control the payroll result.
Income Details That Affect Salary TDS
Do not enter full CTC unless every CTC component is taxable salary. Employer PF, gratuity provision, insurance and reimbursements may sit inside CTC without matching the taxable salary figure used for TDS.
New and Old Regime Inputs for FY 2026–27
| Item | New regime treatment | Old regime treatment |
|---|---|---|
| Salary standard deduction | Up to ₹75,000 | Up to ₹50,000 |
| HRA and LTA exemption | Normally unavailable | Available when conditions and proof are met |
| Professional tax | Not deducted in this estimate | Actual eligible amount, maximum ₹2,500 annually |
| 80C-type claims | Not applied | Applied up to ₹1,50,000 |
| Additional personal NPS | Not applied | Applied up to ₹50,000 |
| Employer NPS | Accepted eligible amount | Accepted eligible amount |
| Self-occupied home interest or house loss | Not set off against salary in this estimate | Applied within the entered eligible limit |
The new regime is the default. An eligible resident with only normal-rate income may receive a rebate of up to ₹60,000 when total income does not exceed ₹12,00,000. Marginal relief may apply just above that level. The old-regime rebate is up to ₹12,500 for an eligible resident whose total income does not exceed ₹5,00,000.
FY 2026–27 New-Regime Tax Slabs
| Taxable income | Rate on the slab |
|---|---|
| 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% |
The calculator also applies resident rebate rules, new-regime marginal relief, surcharge with threshold marginal relief and 4% Health and Education Cess. The selected tax result is rounded to the nearest ₹10 for planning.
Changing Jobs During the Tax Year
A new employer does not automatically know the salary and TDS recorded by the earlier employer. If you omit previous salary but include previous TDS, the estimate can show too little tax. If you omit both, your new employer may calculate TDS only on the new salary and leave a balance for the return.
- Collect the previous employer’s salary and TDS statement.
- Report gross taxable salary, exemptions, deductions and TDS already deducted.
- Avoid claiming the salary standard deduction twice. This calculator applies it once against combined salary.
- Check Form 26AS or the applicable tax-year information statement when credit becomes available.
- Recalculate after a joining bonus, notice-pay adjustment or final settlement.
Form 12BB, Declarations and Proof Submission
Payroll first works with declarations and later verifies claims through documents. The exact process and deadlines differ by employer. Missing or rejected proof can increase TDS sharply in the final payroll months because the remaining annual shortfall has fewer months over which to spread.
- Rent receipts, rental agreement and landlord PAN where required for HRA.
- Home-loan interest certificate and lender details.
- Insurance, provident fund, tuition fee, eligible investment and NPS records.
- Health-insurance premium receipts and eligible family details.
- Previous-employer salary and TDS statement after a job change.
- Evidence for relief or other payroll-accepted tax credits.
Use the “claims still unverified” input to test a conservative old-regime scenario. The result alert shows the extra annual tax if payroll rejects that amount.
Why Monthly TDS Goes Up or Down
- A bonus, salary revision or taxable perquisite raises projected annual income.
- A declaration or proof reduces eligible old-regime income.
- A rejected claim reverses an earlier payroll benefit.
- Previous-employer income increases annual tax, while previous TDS reduces the balance.
- Fewer remaining payroll months make each catch-up deduction larger.
- Tax already deducted above the estimate creates potential excess credit, but the employer’s adjustment policy controls payroll recovery.
Limits of This Calculator
This is an educational salary-withholding estimate for a resident or non-resident individual with ordinary slab-rate salary and disclosed normal-rate income. It does not calculate special-rate capital gains, lottery income, agricultural-income integration, foreign tax credit, detailed perquisite valuation, stock-option deferral, multiple house properties, business income, AMT, treaty treatment or a final income-tax return.
Employer payroll may use different rounding, proof rules, relief computations or adjustment timing. Verify the annual computation, payslips, salary statement, Form 16 and tax information statement. Obtain professional advice for complex income or relief.
Related Salary and Tax Calculators
Frequently Asked Questions
How is TDS on salary calculated in FY 2026–27?
The employer estimates full-year salary income, computes tax at the applicable average rate and deducts the remaining liability through payroll. From April 2026, official transition guidance refers to Section 392(1) of the Income-tax Act, 2025.
Is salary TDS a fixed percentage of monthly salary?
No. Salary TDS is based on estimated annual taxable salary and annual tax. The employer spreads and adjusts the remaining liability across salary payments, so the monthly amount can change.
Which tax regime does an employer use by default?
The new regime is the default. An employee who wants payroll to use the old regime should communicate the choice and submit the declarations and proofs required by the employer.
Can a salary of ₹12.75 lakh have zero new-regime tax?
An eligible resident with only normal-rate salary income can reduce ₹12.75 lakh by the ₹75,000 standard deduction to ₹12 lakh. The resident rebate may then reduce regular slab tax to zero.
How do I include income and TDS from a previous employer?
Enter previous-employer taxable salary in the income section and previous-employer TDS in the credit section. Combine all employers before applying one annual standard deduction.
Why did my employer increase TDS after proof submission?
Payroll may have rejected or reduced an exemption or deduction. The resulting annual shortfall is then collected over the months left, which can produce a larger deduction near year-end.
Can other TDS or TCS reduce salary TDS?
Section 392 permits relevant tax deducted or collected elsewhere to affect the computation when prescribed particulars are furnished. Enter only credits that your employer has accepted for payroll calculation.
What happens if salary TDS already exceeds estimated tax?
The calculator shows zero remaining monthly TDS and potential excess credit. Payroll adjustment depends on the employer’s process. Any final refund depends on total income, valid credits and the filed return.
Is Form 16 the final income-tax calculation?
No. Form 16 reports employer salary and TDS data. Final tax liability is determined after all income, deductions, relief, taxes and applicable rules are considered in the income-tax return.
Official Sources
- Income Tax Department: Section 392, salary tax deduction
- Income Tax Department: Section 19, salary deductions
- Income Tax Department: TDS transition and compliance FAQs
- Income Tax Department: tax rates, surcharge and cess
- Income Tax Department: Form 16 and Form 16A
Disclaimer: This calculator provides a planning estimate, not tax advice or a payroll instruction. Tax law, payroll acceptance and personal facts control the final deduction.