How employers calculate TDS
Your employer estimates your tax for the whole year based on your salary and the regime and investment declarations you've given, then deducts roughly one-twelfth of it every month. If your salary changes, or you submit proofs late, the employer recalculates and spreads whatever is left over the remaining months. That's why TDS often jumps in January to March.
Monthly TDS = (estimated yearly tax − TDS already deducted) ÷ months remainingWorked example
Why your TDS might be wrong
- Wrong regime: the new regime is the default. If you want the old regime, you must tell your employer, usually at the start of the year.
- Proofs not submitted: if you declared investments but didn't submit proofs by the deadline, the employer ignores those deductions and deducts more.
- Job change: both employers may give you the standard deduction and lower slabs, so too little tax is deducted in total. Tell your new employer about income from the previous job.
- Other income: TDS on salary doesn't cover interest, rent or capital gains. You may need to pay advance tax on those.
Checking and correcting
Compare the TDS on your payslip with the figure here each quarter. Your Form 16 (from the employer) and Form 26AS/AIS (on the income tax portal) show the TDS actually deposited. If too much was deducted, you'll get a refund after filing; if too little, pay the balance as self-assessment tax before filing to avoid interest.
To choose the right regime, compare both on the income tax calculator, and see your final monthly pay on the in-hand salary calculator.
Frequently asked questions
Why did my TDS increase suddenly?
Usually because proofs for declared investments weren't submitted, your salary increased, or a bonus was paid. The employer spreads the extra tax over the remaining months.
Can I change my regime midway through the year?
Your employer may allow only one choice during the year, but salaried individuals can still pick either regime when filing their return.
Where can I see TDS deducted?
In your payslip, Form 16, and Form 26AS or the Annual Information Statement on the income tax portal.
Official references: Income Tax Department