What is TDS on Salary?
TDS (Tax Deducted at Source) on salary is the amount deducted by employers from employees' salaries as advance tax payment under Section 192 of the Income Tax Act, 1961. The deducted amount is deposited with the government and reflected in Form 16 provided to employees.
Our comprehensive TDS on salary services include:
- Monthly TDS calculation considering all exemptions
- Quarterly TDS return filing (Form 24Q)
- Form 16 and Form 12BA generation
- TDS certificate issuance (Form 16 Part B)
- Compliance with latest budget changes
Payroll TDS calculated and filed accurately
- Monthly TDS worked out under each employee’s chosen regime
- Form 24Q returns filed every quarter
- Form 16 issued to every employee
TDS on Salary Process Flow
1. Salary Structure Analysis
Reviewing salary components (basic, HRA, allowances, etc.)
2. Exemption Verification
Validating HRA, LTA, and other exemption claims
3. TDS Calculation
Monthly deduction based on applicable tax slabs
4. TDS Deposit
Payment to government by 7th of next month
5. Return Filing
Quarterly filing of Form 24Q
6. Form 16 Issuance
Annual TDS certificate by June 15
TDS on Salary Calculation Methodology
Step-by-Step Calculation Process:
- Gross Salary Computation: Sum of all salary components (Basic + HRA + Allowances + Bonus + etc.)
- Exemptions Deduction: Subtract exempt portions (HRA, LTA, etc.)
- Standard Deduction: ₹50,000 deduction under Section 16(ia)
- Chapter VI-A Deductions: Subtract 80C, 80D, etc. investments
- Tax Calculation: Apply applicable tax rates on taxable income
- Monthly TDS: Divide annual tax liability by 12 months
| Basic Salary | ₹60,000/month |
| HRA | ₹30,000/month (₹15,000 exempt) |
| Other Allowances | ₹10,000/month |
| 80C Investments | ₹1,50,000/year |
| Monthly TDS | ₹7,240 |
TDS on Salary Compliance Requirements
Monthly Compliance
- TDS deduction
- Payment by 7th next month
Quarterly Compliance
- Form 24Q filing
- Due dates: 31st July, 31st Oct, 31st Jan, 31st May
Annual Compliance
- Form 16 issuance by 15th June
- Form 12BA for perquisites
Key Forms for TDS on Salary
Form 24Q
Quarterly TDS return for salary payments
Due Dates: 31st July, 31st Oct, 31st Jan, 31st May
Form 16
Annual TDS certificate for employees
Issuance Deadline: 15th June
Form 12BA
Statement of perquisites and profits in lieu of salary
Required when salary includes non-cash benefits
Form 26AS
Consolidated tax statement showing all TDS deductions
Available on Income Tax Portal
Transparent Pricing
| Service | Basic | Comprehensive |
|---|---|---|
| Monthly TDS Calculation (up to 10 employees) | ₹999/month | ₹1,999/month |
| Quarterly TDS Return Filing (Form 24Q) | ₹1,499/return | ₹2,999/return |
| Annual Form 16 Generation (per employee) | ₹99/employee | ₹149/employee |
| Full Year Compliance Package | ₹9,999/year | ₹14,999/year |
Common Mistakes to Avoid
Salary TDS errors frustrate employees and create notices for employers.
- Not asking for the regime choice – Without it, the new regime is the default.
- Accepting proofs too late – Collect investment proofs before the final quarter.
- Ignoring previous employer income – New joiners’ earlier salary affects TDS.
- Wrong perquisite valuation – Perquisites must be valued and taxed correctly.
- Late Form 16 – Form 16 must reach employees by the due date.
The Salary TDS Year
Regime declaration
Collected from each employee at the start of the year.
Monthly TDS
Calculated and deposited every month.
Quarterly 24Q
Filed after every quarter.
Form 16
Issued to employees after the year ends.
Why Choose Vaidam Consultancy for TDS on Salary
Regime-wise calculation
TDS is calculated under the old or new regime each employee chooses.
Proofs managed
We collect and verify investment and rent proofs before year-end.
Clear, upfront pricing
Our fees are listed on this page, and any government fee is shown separately before we start.
Form 16 on time
Every employee receives Form 16 by the due date.
Frequently Asked Questions
TDS should be deducted every month at the time of salary payment or credit, whichever is earlier.
TDS deducted in a month must be paid to the government by the 7th of the next month (except March - due April 30).
Yes, employers must issue Form 16 to all employees from whom TDS has been deducted.
Employers may face penalties and interest. Employees can claim refunds while filing ITR if excess tax was deducted.
Employees tell the employer which regime they prefer at the start of the year. If they don’t, TDS is deducted under the new regime, which is the default.
Rent receipts for HRA, investment proofs for 80C, health insurance for 80D and home-loan certificates, usually collected before the last quarter.
Salaried employees generally choose the regime for TDS at the start of the year and can make a final choice while filing their return.
No. TDS applies only if the estimated taxable salary exceeds the basic exemption limit.