Tax Deducted: Why is tax deducted from salary? Understand the complete calculation..


The months of January-March are often troublesome for working people. During these three months, their salary suddenly reduced because most of the companies deducted the tax on their salary during these three months. Some companies deduct this tax in the initial months of the financial year itself. But the question is why tax is deducted from your salary, why can't you pay it later while filing ITR and how is it calculated?


The tax that companies or employers deduct from their employee's salaries is called TDS i.e. Tax Deducted Source. Companies or employers deduct this tax in several installments either from every month's salary or from only one quarter's salary.

TDS is decided according to your salary
Every employee's TDS depends on his salary. Therefore, there is no fixed scale as to how much TDS will be deducted from your salary. However, it is calculated on the basis of your estimated taxable income from your package.

If you give information about your investments, HRA, home loan, etc. to your HR department at the beginning of the year, then your estimated taxable income gets reduced and then less tax is deducted from your salary.


How is TDS calculated?
After all, how is it calculated how much TDS will be deducted from your salary every month? Whatever investment and tax regime information you provide to your HR department, the finance department of the company or employer calculates the tax on your taxable income. After this, it is deducted from your salary every month in the same proportion as EMI.

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