What is the TDS Rate on Salary?

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What is the TDS Rate on Salary?
  • 28th Jan 2022 |
  • 805

TDS is the tax deducted at source from income payment at the time of making essential payments, such as rent, profit, professional fees, salary, interest, and so on by the people who make those payouts. In most cases, the individual who receives money is responsible for paying income tax. However, the government ensures that income tax is taken in advance from your payments by using Tax Deducted at Source (TDS) regulations. After deducting TDS, the net amount is given to the income receiver. The total amount is added to the recipient’s income, and the amount of TDS is deducted from their ultimate tax liability. The receiver is given credit for the money which has already been deducted and paid on their behalf.

TDS On Salary

Businesses are also obligated to subtract TDS on salary under Section 192 at the time of giving wages and salaries to their employees. The remaining amount after deduction of TDS is due to be given to the employees. TDS on salary needs to be collected based on the taxpayer’s average income tax rate for the financial year. The average earnings taxation rate is determined using the income tax slab rates in effect for that fiscal year. Every financial year has a different rate. For example, by tilizing TDS calculator for FY 2019-20 you can find out what TDS slab you fall into each year.

TDS On Salary Limit FY 2019-20

TDS On Salary Limit 2019-20

TDS Calculator FY 2019-20

Income up to INR 2.5 Lakhs


Income From INR 2.5 Lakhs to INR 5 Lakhs

5% Of Total Income

Income From INR 5 Lakhs to INR 10 Lakhs

20% Of Total Income + INR 12,500

Income > INR 10 Lakhs

30% Of Total Income + INR 1,12,500

TDS On Insurance

While TDS is normally taken from a life insurance policy’s maturity value, it is not the same everywhere. Under Section 10 (10D), you can save TDS on life or term insurance if:

  • The plans were issued on or before March 31, 2012, with an amount assured of at least 5 times the average premium paid.
  • The policies were issued on or after April 1, 2012, with an amount assured of at least 10 times the yearly premium paid.

TDS Tax benefits on specific allowances exist, just as they do for other forms of taxes. The Income Tax Department offers TDS exemptions and tax benefits under the following conditions:

  • Those who are not required to file a Section 139 income tax return. /li>
  • For those tax payers who make a disclosure under Section 15G/15H at the start of the fiscal year and have it validated by the deductor in accordance with the regulations.
  • For those instances that are explicitly exempted under Section 194A of the Income Tax Act (subsection 3).
  • For those who acquire a certification from the assessment authority under Section 197 of the Income Tax Act. This certification orders deductor not to deduct tax on that specific assesse, or to deduct tax at a reduced rate, or to deduct tax in accordance with the certificate’s terms. The certificate’s legitimacy is also determined by the Income Tax Officer.

To summarize, if you don’t have the right and adequate understanding of TDS, the entire notion might be confusing. Although, after completing thorough research and becoming aware of everything that it includes, this feature of a perfectly operating economy only serves to benefit everyone.

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