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Salary TDS calculator: new vs old tax regime
Estimate income tax on salary for the year under both regimes, see which one is lower, and work out the monthly TDS for the months left in the financial year.
How TDS on salary is estimated
An employer does not deduct a flat percentage from salary. It estimates the employee's taxable income for the whole financial year, works out the tax under the regime the employee has chosen, and spreads that tax over the months of the year. This is TDS under Section 192 of the Income-tax Act, 1961; the Income-tax Act, 2025, which applies from 1 April 2026, renumbers the sections.
When salary, declarations or the regime change mid-year, the balance is re-spread over the months left. That is why the calculator asks for TDS already deducted and the months remaining.
Slabs used
These are the rates announced in Budget 2025 for FY 2025-26 onwards. Confirm them for the year you are calculating.
| New regime taxable income | Rate | Old regime taxable income (below 60) | Rate |
|---|---|---|---|
| Up to ₹4 lakh | Nil | Up to ₹2.5 lakh | Nil |
| ₹4 lakh to ₹8 lakh | 5% | ₹2.5 lakh to ₹5 lakh | 5% |
| ₹8 lakh to ₹12 lakh | 10% | ₹5 lakh to ₹10 lakh | 20% |
| ₹12 lakh to ₹16 lakh | 15% | Above ₹10 lakh | 30% |
| ₹16 lakh to ₹20 lakh | 20% | ||
| ₹20 lakh to ₹24 lakh | 25% | ||
| Above ₹24 lakh | 30% |
The rebate removes tax up to ₹60,000 when new-regime taxable income is ₹12 lakh or less. Just above ₹12 lakh, marginal relief keeps tax from exceeding the income above ₹12 lakh. In the old regime the rebate is up to ₹12,500 at ₹5 lakh or less, with no marginal relief. Surcharge applies above ₹50 lakh (10%), ₹1 crore (15%), ₹2 crore (25%) and ₹5 crore (37%, old regime only), with marginal relief at each step.
Worked example
Worked example: the calculator's default figures
Gross salary ₹18,00,000 and other income ₹20,000, so gross income is ₹18,20,000. ₹60,000 of TDS has been deducted and 7 months are left.
New regime: ₹18,20,000 − ₹75,000 = ₹17,45,000 taxable. Slab tax = ₹20,000 + ₹40,000 + ₹60,000 + ₹29,000 (20% of ₹1,45,000) = ₹1,49,000. No rebate above ₹12 lakh. Cess ₹5,960 makes it ₹1,54,960. Monthly TDS = (₹1,54,960 − ₹60,000) ÷ 7 = ₹13,566.
Old regime: deductions are HRA exemption ₹1,80,000, standard deduction ₹50,000, professional tax ₹2,400, 80C ₹1,50,000, 80D ₹25,000 and 80CCD(1B) ₹50,000, a total of ₹4,57,400. Taxable income is ₹13,62,600. Slab tax = ₹12,500 + ₹1,00,000 + ₹1,08,780 (30% of ₹3,62,600) = ₹2,21,280. Cess ₹8,851 makes it ₹2,30,131. Monthly TDS = ₹1,70,131 ÷ 7 = ₹24,304.
The new regime is lower by ₹75,171. Even adding ₹2,00,000 of home-loan interest to the old regime leaves it ₹12,771 higher.
What is and isn't included
- Included: standard deduction, rebate with new-regime marginal relief, surcharge with marginal relief, 4% cess and the employer NPS limit.
- Not included: higher old-regime exemption limits for senior and super senior citizens.
- Not included: capital gains and other special-rate income, salary from a previous employer in the same year, perquisite valuation and arrears relief.
- Not included: the HRA exemption calculation itself, and the age-based limits within 80D (capped here at ₹1,00,000). Enter the amounts you are eligible for.
- Not included: the ₹7.5 lakh combined limit on tax-free employer contributions to PF, NPS and superannuation.
- Tax is rounded to the nearest rupee at each step; returns round taxable income to the nearest ₹10.
What the employer does with the figure
TDS deducted from salary is deposited by the 7th of the following month (30 April for tax deducted in March) and reported in the quarterly TDS return. Our guide to TDS on salary covers the process.
Swastik Payroll records TDS as a deduction for each employee, shows it on the payslip and includes it in the payroll report export. It does not compute income tax or prepare TDS returns. Those stay with the employer or CA, and this calculator is a quick way to check the monthly figure.
Frequently asked questions
Which regime does the employer use if I don't choose?
Under the 1961 Act, the new regime is the default unless the employee tells the employer they want the old regime. Salaried employees without business income could still choose the other regime when filing their return. Confirm how this works under the 2025 Act for the current year.
Why did my TDS go up in the later months?
Usually because an increment, bonus or missed investment proof raised the estimated annual tax. The shortfall is spread over fewer remaining months, so each month's TDS rises.
Is salary up to ₹12 lakh tax-free in the new regime?
Taxable income up to ₹12 lakh carries no tax because of the rebate. For a salaried employee with no other income, the ₹75,000 standard deduction takes that to a gross salary of ₹12,75,000. Just above it, marginal relief applies. The CTC calculator shows how that plays out in monthly pay.
When is the old regime better?
Only when deductions are large relative to income, typically a big HRA exemption, a home loan and full 80C, 80D and NPS claims together. Enter your own figures to see where the two meet, or read old vs new tax regime.
Does employer NPS reduce tax in the new regime?
Yes. The employer's NPS contribution is deductible up to 14% of basic + DA in the new regime (10% for private employers in the old regime), and it is one of the few deductions the new regime allows.
Results are estimates for planning. Statutory rates, ceilings and tax rules change; check the current notifications or consult your CA before using a figure for payroll or tax filing.
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Stop calculating payroll by hand
Swastik Payroll applies these rules to every employee automatically, straight from attendance, and produces payslips and PF/ESIC files.