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Salary Tax
Updated: 15th August 2026•Income-tax Act, 2025 (TY 2026-27)

TDS on Salary (Section 192): Deduction Rules, Proof Submission & Form 16

वेतन पर टीडीएस (धारा 192) नियम

Comprehensive guide to Tax Deducted at Source (TDS) on salary under Section 192 of the Income Tax Act: how employers estimate annual tax, monthly deduction mechanics, investment declaration windows, and Form 16 issuance.

Written by: Author Profile
Direct Tax & CA Review Panel

Chartered Accountancy Review Panel • Senior Direct Tax Review Desk

Reviewed & Fact-Checked by: Technical Review Panel
Tax Law & Dispute Review Desk

Tax Litigation & Legal Review Panel • Tax Appeal & Procedure Review Desk

Published: 1st April 2026•Last Updated: 15th August 2026•Last Reviewed: 15th August 2026

Key Statutory Highlights (FY 2026-27 (AY 2027-28))

TDS is deducted by the employer only if total estimated annual salary exceeds the basic exemption limit (₹3,00,000 New / ₹2,50,000 Old).
Deduction occurs on an average monthly estimated tax basis across 12 calendar months.
Employees must declare their chosen regime (New vs Old) and provide supporting investment proofs to payroll by January/February.
TDS deducted must be remitted by the employer to the government treasury by the 7th of the following month.

Who is Eligible & When Does it Apply?

Applicability #1

All salaried employees receiving taxable remuneration from any registered employer in India.

Step-by-Step Procedure & Compliance Roadmap

1

Submit Initial Tax Declaration (April / May)

Declare chosen regime (New or Old) and intended tax-saving investments at the beginning of the financial year.

2

Employer Computes Estimated Average Tax Rate

Payroll estimates your total tax liability for the year and divides it into equal monthly TDS deductions.

3

Submit Actual Investment Proofs (Jan / Feb)

Provide receipts for 80C, 80D, rent agreements, and housing loan interest certificates to finalize tax calculation.

4

Employer Issues Form 16 (By 15th June)

Receive Form 16 Part A and Part B certifying total TDS deducted and deposited with the government.

Mandatory Documents Checklist

Investment proofs (ELSS, LIC, PPF, NPS receipts)
Rent agreement, landlord PAN & rent receipts
Home loan provisional interest certificate

Common Mistakes & Compliance Risks to Avoid

•Failing to submit investment proofs on time, causing heavy TDS deduction in February and March payslips.
•Not checking TRACES Form 26AS to confirm employer deposited the deducted TDS.

Frequently Asked Questions

Can excess TDS deducted on salary be refunded?

Yes! If excess TDS was deducted, you can claim a 100% refund with statutory interest by filing your ITR before 31st July on the income tax portal.

Interactive Tax Calculators
Salary Take-Home CalculatorTDS Calculator
Related Tax Knowledge
Form 16 GuideSalary Tax Guide
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🛡️ Educational Disclaimer: FinSetu India is an independent educational guidance and calculation platform. Content is published for general citizen awareness based on applicable laws as of FY 2026-27 (AY 2027-28). We do not provide personalized legal/tax advice or file returns directly. Verify current applicable rules on official portals or consult a qualified Chartered Accountant / Tax Lawyer.