Can I choose between Old and New tax regime for TDS?

Yes. At the start of the financial year, your employer asks you to declare your preferred tax regime via Form 12BB. The New Regime is the default if you don't choose. You can switch between regimes when filing your ITR, but for TDS deduction purposes during the year, your employer follows your declared choice.

Free TDS Calculator

Q: How is TDS calculated on salary?

TDS on salary is calculated by: 1) Taking your annual gross salary, 2) Subtracting standard deduction (₹75,000 under New Regime), 3) Subtracting eligible deductions (80C, 80D etc. under Old Regime), 4) Applying the applicable tax slab rates, 5) Adding 4% health and education cess, 6) Dividing the total tax by 12 to get monthly TDS. Our calculator does all this instantly.

Q: What is the TDS rate on salary in 2026?

There is no single TDS rate on salary. TDS is calculated based on income tax slab rates applicable to your total taxable income. Under the New Regime for FY 2026-27: 0% up to ₹3L, 5% on ₹3-7L, 10% on ₹7-10L, 15% on ₹10-12L, 20% on ₹12-15L, and 30% above ₹15L. The effective TDS rate depends on your salary level.

Q: What deductions are allowed under Old Regime?

Under the Old Regime, you can claim: Section 80C (₹1.5L for PPF, ELSS, LIC, EPF), Section 80D (₹25K-₹50K for health insurance), HRA exemption (based on rent paid), Section 24b (₹2L for home loan interest), Section 80CCD(1B) (₹50K additional NPS), and standard deduction of ₹50,000. These reduce your taxable income and therefore your TDS.

Q: Is TDS applicable on salary below ₹7 lakh?

Under the New Regime, if your taxable income is ₹7,00,000 or less, you get full tax rebate under Section 87A — meaning zero tax and zero TDS. Under the Old Regime, the rebate threshold is ₹5,00,000. However, your employer will still calculate TDS based on your declared investments and regime choice.

Q: How do I check my TDS deductions?

You can check TDS deductions through: 1) Your monthly payslip — shows TDS deducted, 2) Form 26AS on the income tax portal — shows all TDS credits, 3) Form 16 issued by your employer after March — annual TDS certificate, 4) AIS (Annual Information Statement) on the IT portal. All TDS deposited by your employer appears here.

Q: What is the difference between TDS and income tax?

TDS is an advance payment of income tax collected at the source of income (your salary). Income tax is the total annual tax liability calculated when you file your ITR. If TDS deducted during the year is more than your actual tax liability, you get a refund. If it's less, you pay the balance as self-assessment tax. TDS is essentially a prepayment mechanism.

Q: Does TDS differ for Delhi, Noida and Gurugram employees?

TDS calculation on salary is the same across India — it follows central income tax rules, not state rules. However, the net salary differs because Professional Tax varies by state (Delhi and UP charge ₹0, Haryana charges ₹200/month). Also, HRA exemption calculations differ as Delhi is classified as a metro city (50% of Basic) while some NCR areas may use 40%.

Calculate Your Monthly TDS Deduction Instantly

Compare TDS under New and Old tax regime side by side. See which regime saves you more tax for FY 2026-27. Built for Delhi NCR salaried employees.

Both Regimes Section 87A Applied FY 2026-27 Slabs

Last updated: 20 March 2026 · FY 2026-27 / AY 2027-28

TDS Calculator

Annual Gross Salary

₹

Age Group

Deductions (Old Regime Only)

80C (PPF, ELSS, LIC)

80D (Health Insurance)

HRA Exemption

Home Loan Interest (24b)

NPS 80CCD(1B)

Other Deductions

Enter your salary and deductions to compare TDS under both regimes

FY 2026-27 Tax Slabs

Income Tax Slab Rates for Salaried Employees

New Tax Regime (Default)

Income Slab	Rate
Up to ₹3,00,000	0%
₹3,00,001 – ₹7,00,000	5%
₹7,00,001 – ₹10,00,000	10%
₹10,00,001 – ₹12,00,000	15%
₹12,00,001 – ₹15,00,000	20%
Above ₹15,00,000	30%

Old Tax Regime

Income Slab	Rate
Up to ₹2,50,000	0%
₹2,50,001 – ₹5,00,000	5%
₹5,00,001 – ₹10,00,000	20%
Above ₹10,00,000	30%

Understanding TDS

How TDS on Salary Works in India

What is TDS on Salary?

TDS (Tax Deducted at Source) is the mechanism through which your employer deducts income tax from your salary every month before paying you. Under Section 192 of the Income Tax Act, every employer is legally required to estimate your annual tax liability at the start of the financial year and deduct it in equal monthly installments. This ensures the government receives tax revenue throughout the year rather than in a lump sum.

How Your Employer Calculates TDS

Estimate annual gross salary — Basic + HRA + Special Allowance + Bonus + other components
Apply standard deduction — ₹75,000 under New Regime, ₹50,000 under Old Regime
Deduct exemptions — HRA exemption, LTA (Old Regime only)
Deduct Chapter VI-A — 80C, 80D, 80CCD, etc. (Old Regime only)
Calculate taxable income — Gross minus all deductions
Apply slab rates — Based on chosen regime
Apply Section 87A rebate — If eligible (income up to ₹7L new / ₹5L old)
Add 4% cess — Health and Education Cess on tax amount
Divide by 12 — Monthly TDS = Annual tax ÷ 12

Delhi NCR TDS Specifics

While TDS rules are central (same across India), your take-home salary in Delhi NCR differs from other cities because of:

Professional Tax: Delhi and UP (Noida) = ₹0/month. Haryana (Gurugram) = ₹200/month. This doesn't affect TDS but affects net pay. See our Professional Tax guide.
HRA Exemption: Delhi, Noida, and Gurugram are metro cities → 50% of Basic is the HRA cap for exemption calculation under the Old Regime.
Rent receipts: For HRA exemption above ₹1 lakh/year, you need your landlord's PAN. Delhi NCR rents are high, making this a significant deduction under the Old Regime.

For a complete breakdown of TDS rules, employer obligations, Form 16, and compliance calendar, read our detailed TDS on Salary for Delhi Employees guide.

When is the New Regime Better?

The New Regime is better if your total deductions under the Old Regime are less than ₹3-4 lakh. Most employees who only have basic 80C investments (₹1.5L) and health insurance (₹25K) end up paying less tax under the New Regime. Use our calculator above to compare both scenarios with your actual numbers.

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Common Questions

Frequently Asked Questions

What is TDS on salary?

TDS (Tax Deducted at Source) on salary is the income tax your employer deducts from your monthly salary before paying you, as mandated under Section 192 of the Income Tax Act. Your employer estimates your total annual tax liability, divides it by 12, and deducts that amount each month.

How is TDS calculated on salary?

TDS is calculated by: taking your annual gross salary, subtracting standard deduction (₹75,000 New / ₹50,000 Old), subtracting eligible deductions (Old Regime only), applying tax slab rates, adding 4% cess, and dividing total tax by 12 for monthly TDS.

What is the TDS rate on salary in 2026?

There is no single TDS rate. It depends on your total taxable income and slab rates. Under the New Regime: 0% up to ₹3L, 5% on ₹3-7L, 10% on ₹7-10L, 15% on ₹10-12L, 20% on ₹12-15L, and 30% above ₹15L.

Can I choose between Old and New tax regime?

Yes. Declare your choice to your employer via Form 12BB at the start of the financial year. The New Regime is the default. You can switch when filing your ITR, but for TDS purposes your employer follows your declared choice.

What deductions are allowed under Old Regime?

Section 80C (₹1.5L for PPF, ELSS, LIC), Section 80D (₹25K-₹50K health insurance), HRA exemption (based on rent), Section 24b (₹2L home loan interest), Section 80CCD(1B) (₹50K NPS), and standard deduction of ₹50,000.

Is TDS applicable on salary below ₹7 lakh?

Under the New Regime, if taxable income is ₹7L or less, Section 87A rebate makes tax zero. Under Old Regime, the rebate threshold is ₹5L. So effectively no TDS if your taxable income falls within these limits.

How do I check my TDS deductions?

Check through: your monthly payslip, Form 26AS on the income tax portal, Form 16 from your employer (issued after March), and the AIS (Annual Information Statement) on the IT portal.

What is the difference between TDS and income tax?

TDS is advance tax collected at source (from your salary). Income tax is your total annual liability calculated when filing ITR. If TDS exceeds actual liability, you get a refund. If less, you pay the balance as self-assessment tax.

Does TDS differ for Delhi, Noida and Gurugram employees?

TDS calculation is the same across India (central income tax rules). However, net salary differs because Professional Tax varies (Delhi/UP = ₹0, Haryana = ₹200/month) and HRA exemption calculations depend on city classification.

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