TDS: Is TDS deducted from your salary also, then know how it is calculated..
TDS (tax deducted at source) is deducted every month from your salary by the employer. TDS is deducted from salary under Section 192 of the Income Tax Act, 1961.
What will be the TDS rate on salary depends on your salary. Depending on your salary, you fall into different tax slab rates. According to the tax slab, the rate of TDS deduction on your salary ranges from 10 percent to 30 percent.
If TDS is deducted from your salary also, then you should know how TDS is calculated from your salary.
How is TDS calculated?
The employer deducts TDS from the salary of his employee at the 'average rate' of income tax. The formula to calculate TDS is Average income tax rate = Income tax payable (calculated at the slab rate) divided by the employee's estimated income for the financial year.
Calculation of TDS on salary
TDS on salary is calculated by deducting the exemption amount from the employee's total annual salary income. The exemption limit is specified by the Income Tax Department. At the time of calculation of TDS on salary; The employer has to obtain proof and declaration from the employee before accepting the exemption amount.
TDS is deducted every month
Since your salary is paid every month, your employer deducts TDS from your salary every month. If your employer does not deduct TDS in a month, then in such a situation the employer is responsible for paying the penalty and interest.
How to claim TDS?
Deduction of TDS does not mean that your money is lost. If your income is not taxable then you can claim your TDS by filing ITR after every financial year.