Quick Summary
Tax Deducted at Source (TDS) is a key component of India’s taxation system, ensuring income tax is collected directly at the source. Whether you are a salaried professional, freelancer, business owner, or investor, understanding how to calculate TDS accurately is essential for compliance and financial planning. In this comprehensive 2025 guide, we explain TDS in detail and show you how to use a reliable TDS Calculator to calculate tax deductions quickly, accurately, and effortlessly.
A TDS calculator is an online tool that helps individuals and businesses determine the amount of tax that will be deducted from the source of their income. This tool is essential for employees, freelancers, self-employed individuals, and business owners who must ensure compliance with the tax laws set by the Indian government.
The TDS calculator allows users to enter specific details about their income, deductions, and applicable exemptions. The tool then calculates the TDS based on the income tax slabs defined by the government. Some tools consider exemptions like HRA (House Rent Allowance) and 80C deductions.
Here’s a simple breakdown:
A TDS (Total Dissolved Solids) calculator measures the concentration of dissolved solids in water, typically in parts per million (ppm). This can help you assess water quality, especially for drinking, aquariums, or industrial processes.
In a different context, an income tax calculator is useful for individuals to estimate their tax liabilities based on their income, deductions, and applicable tax rates. A salary TDS calculator in India determines the Tax Deducted at Source from an employee’s salary based on their income and appropriate deductions. Here’s how to use a TDS calculator:
These calculators can help you make informed decisions, whether assessing water quality or managing your tax obligations effectively. This TDS calculator on the government website can be utilized to calculate your TDS.
The TDS calculator allows you to quickly determine how much Tax Deducted at Source is applied to your salary and calculate your exact in-hand income. It supports better financial planning and budgeting by providing instant, accurate results without the need to sign up or log in simply enter basic details, and the calculator does the rest in seconds.
Powered by a precise algorithm, the tool eliminates tedious manual calculations and minimizes errors, giving you reliable results instantly. This makes it easier to plan your finances, understand deductions, and make informed decisions without hassle.
If you’re curious about how TDS is calculated manually, here’s an example:
Example:
You’re earning a monthly salary of ₹50,000. Your employer deducts TDS based on your annual income. Assume no exemptions for simplicity.
Using a TDS Calculator, you can confirm this amount instantly without doing the math manually.
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In India, Tax Deducted at Source (TDS) is governed by various sections of the Income Tax Act, 1961. Each section specifies the type of income, the applicable TDS rate, and the entities responsible for deducting the tax. Here’s a breakdown of the key TDS sections in India:
Tax Deducted at Source is how the government collects tax directly from your income at the source. Here is the table showing the TDS (Tax Deducted at Source) rates for the Financial Year (FY) 2025-26:
| Nature of Payment | Threshold Limit (₹) | TDS Rate |
|---|---|---|
| Salary | ₹2,50,000 | Slab Rates |
| Premature withdrawal from EPF | ₹50,000 | 10% |
| Interest on securities | ₹10,000 | 10% |
| Dividend | ₹5,000 | 10% |
| Interest from banks or post offices | ₹40,000 (senior citizens) / ₹50,000 (others) | 10% |
| Winnings from lotteries, puzzles, or games | Aggregate of ₹10,000 | 30% |
| Winnings from online games | No limit | 30% |
| Payments to contractors or subcontractors | ₹30,000 (single transaction) / ₹1,00,000 (aggregate transactions) | 1% (individuals/HUF) / 2% (others) |
| Commission on insurance sales | ₹15,000 | 10% |
| Maturity of life insurance policy | ₹1,00,000 | 5% |
| Payments under the Joint Development Agreement | ₹2,40,000 | 10% |
| Rent paid for plant and machinery | ₹2,40,000 | 2% |
| Transfer of immovable property | ₹50,00,000 | 1% |
| Payments under the Joint Development Agreement | No limit | 10% |
Using a TDS Calculator can help you quickly determine the amount of TDS that should be deducted based on your income and the applicable TDS rate. This can simplify the process and ensure you’re compliant with tax regulations.
Understanding these TDS rates and how to use a TDS Calculator can help you manage your finances better and ensure you’re not overpaying or underpaying taxes.
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Numerous factors affect TDS calculation; some of the factors mentioned are –
According to the new tax regime, the income and its tax rates are as follows –
| Income Range (₹) | Income Tax Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
TDS is calculated using your estimated revenue for the financial year at an average tax rate. Thus, the change in the Income tax rate affects the TDS calculation.
TDS is deducted at various rates depending on the circumstances. The deduction for TDS calculation is based on the individual’s wage. Several restrictions and exceptions apply to TDS, such as those with lower incomes or agricultural incomes with little or no TDS duty. Also, for salaried individuals, the HRA deduction can be claimed under Section 10(13A), and for self-employed or salaried employees who do not receive HRA, it can be claimed under Section 80GG.
As per the Budget 2025, several updates have been introduced in TDS regulations to simplify compliance. The TDS must be applied on applicable payments as per the revised thresholds, and tax-free perquisite limits have been increased under Section 17(2)(iii) and Section 115BAC. The highest surcharge on income above ₹5 crore under the new tax regime has been reduced from 37% to 25%. These changes in TDS rates, thresholds, and surcharge rules impact TDS calculations for individuals and businesses in FY 2025–26.
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Filing TDS (Tax Deducted at Source) returns is important to the TDS process. Here’s a simple guide to help you understand how it works:
TDS returns are a statement that the deductor (the person who deducts tax) must submit to the government. This statement contains details about the TDS deducted and deposited with the government. It ensures that all TDS deductions are accurately reported and accounted for.
There are different TDS forms used for various types of payments. Here are some common forms:
A TDS calculator can help you reconcile these amounts.
Using a TDS Calculator can be extremely helpful when managing your taxes. Here are some of the key benefits:
By leveraging the benefits of a TDS Calculator, you can streamline the tax deduction process, improve accuracy, and save time.
| Feature | Manual Calculation | Using TDS Calculator |
|---|---|---|
| Accuracy | Prone to errors | High |
| Time Required | Longer | Instant |
| Ease of Use | Complex | Simple |
| Recommended | For Experts | Everyone |
A TDS Calculator is the preferred method for individuals and businesses due to its simplicity and accuracy.
A TDS calculator is a must-have tool for individuals, freelancers, and business owners in India to ensure accurate tax deductions and stay compliant with FY 2025–26 regulations. By simplifying complex calculations, it saves time, eliminates errors, and provides clear insights into post-tax income for smarter financial planning. Start using a trusted TDS calculator today to take control of your taxes, plan effectively, and stay confident in managing your finances.
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TDS Calculation on Salary:
For example, if your estimated total taxable income for the current financial year is ₹10,00,000 and you are employed for 12 months, your monthly TDS amount would be ₹10,00,000 X 30% / 12 = ₹25,000.
TDS rate depends on the income level of individuals and corresponding tax slabs. According to the Income Tax Act, 1961, no tax is payable for annual taxable income up to Rs 2.5 lakh. Post that, TDS is 510% for income between Rs 2.5-5 lakh, 20% for Rs 5-10 lakh and 30% if income exceeds Rs 10 lakh.
A TDS calculator on salary under Section 192B helps you calculate the TDS for salary income as per the specified tax rules.
A TDS calculator on FD (Fixed Deposit) helps you calculate the TDS on the interest earned from your fixed deposit.
1. Step 1: Log in to the e-filing portal.
2. Step 4: Click on the ‘View Tax Credit (Form 26AS/Annual tax statement)’ to view your Form 26AS/Annual tax statement.
3. Step-1: Visit the TRACES Portal. Enter the captcha code to proceed.
4. Step-1: Visit the official site.
Yes, you can calculate TDS for salaries, interest income, professional fees, rent, commissions, and more, based on the relevant TDS section of the Income Tax Act.
Sometimes, the total TDS deducted during the financial year may exceed the taxpayer’s actual tax liability. In such cases, the excess tax paid can be claimed as a TDS refund by filing an Income Tax Return (ITR).
The TDS threshold limit for Section 194C applies only when the contractor’s one-time payment exceeds Rs. 30,000 or Rs. 1,00,000 in aggregate in a financial year.
The standard TDS rate is 10%, but there are exemption limits for individuals below 60 years (Rs. 50,000) and senior citizens (Rs. 100000). To avoid TDS deduction, you can submit Form 15G or 15H to your bank.
Authored by, Sakshi Arora
Digital Content Writer
Sakshi is a Content Creator and Strategist who specializes in crafting well-researched content across diverse topics including economics, finance, health, and more. She brings a fresh perspective to every piece she writes, always aiming to offer real value to her readers. When she’s not writing, you’ll likely find her curled up with a book—she’s a proud bookworm—or sipping on endless cups of chai, her favorite obsession.
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