How is TDS on salary computed?

Question

tdsguru.in (CA firm) · Accepted Answer

The employer estimates the employee's annual taxable salary under the chosen regime, computes the yearly tax, and deducts it in roughly equal monthly instalments over the year. Under Section 192, the employer estimates the employee's annual salary income, allows eligible exemptions and deductions for the chosen tax regime, computes the tax (including rebate, surcharge and cess), and divides it across the remaining months of the year for monthly deduction. The estimate is revised as salary, declarations or proofs change, and trued-up by March. Other income or losses declared by the employee can also be factored in. A salary TDS calculator that handles both regimes makes this straightforward.