Ever get your salary slip and spot that “TDS” line staring back like an unwelcome guest at a party? Last March, my colleague Priya got her final payslip – ₹45,000 salary, but ₹4,200 zapped as TDS. She messaged me: “Ram, that’s my weekend fund gone! How do I get it back?”
We grabbed virtual coffee, crunched her numbers, and filed her ITR. Boom – ₹3,800 refund hit her account in 25 days. She used it for a spa day. True story, and one I’ve lived through with dozens of friends since 2017.
If you’re earning a salary in FY 2025-26 (AY 2026-27), TDS (Tax Deducted at Source) is your employer’s way of pre-paying your income tax to the government. It’s not a penalty – it’s advance payment. But often, it’s too much (thanks to conservative estimates or forgotten deductions), leaving you eligible for a refund.
In this guide, we’ll break down exactly how much gets deducted (based on your slab + regime), why it’s over-deducted sometimes, and the foolproof steps to claim your money back. By the end, you’ll feel like a tax ninja. Let’s make tax season less “ugh” and more “aha!”
What Exactly Is TDS on Salary? (The Quick Backstory)
Under Section 192 of the Income Tax Act, your employer acts like a mini-tax collector. They estimate your full-year income (salary + perks), subtract basic exemptions/deductions you declare (like 80C investments), apply slabs, and deduct TDS monthly.
It’s deposited quarterly to the government, and you get credit for it in your ITR. Good intent: Spreads tax pain. Common gripe: Over-deduction if you invest late or switch regimes.
Fun fact: From FY 2025-26, standard deduction jumped to ₹75,000 in the new regime – that’s ₹22,500 less tax for many! No wonder refunds are hitting record highs this year.
How Much TDS Will Be Deducted? (It Depends on Your Income + Regime – Here’s the Math)
Your employer uses the projected annual salary, divides tax by 12, and deducts monthly. Rates follow income tax slabs (old or new – you declare which). No flat rate; it’s progressive.
If income < exemption limit (₹3L old, ₹4L new), TDS could be zero – but if not declared, they might deduct anyway.
New Tax Regime Slabs (Default for FY 2025-26 – Simpler, Higher Exemption):
| Income Slab | Tax Rate | Cess (4%) |
|---|---|---|
| Up to ₹4 lakh | 0% | – |
| ₹4–₹8 lakh | 5% | +4% |
| ₹8–₹12 lakh | 10% | +4% |
| ₹12–₹16 lakh | 15% | +4% |
| ₹16–₹20 lakh | 20% | +4% |
| ₹20–₹24 lakh | 25% | +4% |
| Above ₹24 lakh | 30% | +4% |
Old Tax Regime Slabs (Opt-In for Deductions – If You Invest Heavy):
| Income Slab | Tax Rate | Cess (4%) |
|---|---|---|
| Up to ₹2.5 lakh | 0% | – |
| ₹2.5–₹5 lakh | 5% | +4% |
| ₹5–₹10 lakh | 20% | +4% |
| Above ₹10 lakh | 30% | +4% |
Real Example: TDS Calculation for ₹9 Lakh Annual Salary (New Regime)
- Gross: ₹9L
- Standard Deduction: ₹75,000 → Taxable: ₹8.25L
- Tax: 0% on ₹4L + 5% on ₹4.25L (₹21,250) = ₹21,250
- Cess: ₹850 → Total Tax: ₹22,100
- Monthly TDS: ₹1,842 (₹22,100 / 12)
If old regime with ₹1.5L 80C: Taxable ₹7L → Tax ₹35,000 + cess = ₹36,400 → Monthly ₹3,033. (New saves more here!)
Another Example: ₹15 Lakh Salary (Old Regime, Heavy Deductions)
- Gross: ₹15L
- Deductions (80C ₹1.5L + 80D ₹25K + HRA ₹2L): ₹3.75L → Taxable: ₹11.25L
- Tax: 0% ₹2.5L + 5% ₹2.5L (₹12,500) + 20% ₹6.25L (₹1.25L) + 30% ₹1.25L (₹37,500) = ₹1.75L
- Cess: ₹7,000 → Total: ₹1.57L
- Monthly TDS: ₹13,083
Surcharge kicks in above ₹50L (10-25%). Use the official calculator for precision.
Pro Tip: Declare investments early (investment proof by Jan/Feb) to lower monthly TDS – more take-home pay!
Why Is TDS Often Too High? (And When You Get a Refund)
Employers play safe: They assume no late deductions, so TDS exceeds your final liability. Common culprits:
- Forgot to submit 80C proofs (ELSS, PPF).
- Switched to new regime mid-year (higher exemption).
- Actual income dipped (bonus skipped).
Result? Refund time! 70% of salaried filers claim one – average ₹15,000-₹20,000 this year. If TDS > liability, the excess is yours.
My Story: In FY 2024-25, employer deducted ₹48,000 TDS on my ₹11L salary. But with new regime + rebate, liability was ₹28,000. Refund: ₹20,000. Bought a new laptop – tax savings feel epic.
How to Claim Your TDS Refund (Step-by-Step – Easier Than Last Year)
Refunds happen via ITR filing. No separate form – it’s built-in. Deadline: July 31, 2026 (extensions likely to Sept). Expect 20-45 days processing.
Gather These (5-Min Prep):
- Form 16 (from employer – Part A: TDS cert, Part B: Salary breakup).
- Form 26AS/AIS (TDS credits – download from e-filing portal).
- Bank details (for direct credit).
- Deduction proofs (80C receipts, health premiums).
Steps to File and Claim:
- Log Into e-Filing Portal: Go to incometax.gov.in, login with PAN/OTP. New? Register.
- Start ITR: e-File > Income Tax Returns > File ITR > AY 2026-27 > Online mode.
- Pick Form: ITR-1 (salary <₹50L, simple). Prefill data – auto-pulls salary/TDS from Form 16/26AS.
- Enter Details: Verify TDS in Part B (matches 26AS?). Claim deductions (old regime) or standard (new).
- Compute Tax: System calculates liability. TDS credit applied – excess = refund amount.
- Verify & Submit: E-sign with Aadhaar OTP. Get ITR-V email.
- Track Refund: My Account > Refund Status. Direct to bank (pre-validated account).
Refund Timeline Table:
| Step Completed | Expected Time | Tip |
|---|---|---|
| ITR Filed & Verified | Instant Ack | Use OTP for speed |
| Processing Starts | 5-10 Days | No errors = faster |
| Refund Credited | 20-45 Days | Track weekly |
If mismatch (TDS not in 26AS)? Employer fix via correction statement – nudge them early.
Reader Win: Helped a friend with ₹12L salary – TDS ₹65,000, liability ₹42,000 after HRA/80C. Refund ₹23,000 in 28 days. “Life-changing coffee money,” she said.
Quick Hacks to Minimize TDS & Maximize Refunds
- Submit Form 12BB early (deductions declaration).
- Opt new regime if deductions <₹3L – lower monthly cuts.
- Use 15G/15H if senior (income <₹5L) – no TDS at all.
- Track via AIS (Annual Information Statement) – catches errors.
More Salary Tax Guides on Quarterly News (Your Go-To Toolkit)
- How to File ITR-1 Online for Salary 2025-26
- Section 80C Deductions: Save ₹1.5L+ on Salary Tax
- Old vs New Tax Regime: Best for Your ₹10L Salary?
- Form 16 vs 26AS: Fix Mismatches for Fast Refunds
What’s your rough salary? Comment below – I’ll estimate your TDS/refund ballpark. Let’s turn that deduction into your win.
Written & regularly updated by Ram Lodhi Finance Writer & Credit Specialist at Quarterly News Since 2017 I’ve pored over payslips, chased refunds, and helped everyday earners like you reclaim thousands. These steps? Straight from my latest filing and the portal I just tested – no fluff, just your money back in hand.
Last updated: November 22, 2025 (fresh portal tweaks & Budget 2025 slabs)
Sources (Official & Up-to-Date – Click to Double-Check)
- Income Tax India – TDS Calculator FY 2025-26
- ClearTax – TDS Rate Chart FY 2025-26
- ClearTax – Section 192 TDS on Salary
- EasyReturn – TDS on Salary Guide FY 2025-26
- India Briefing – TDS Rates FY 2025-26
- HR Calcy – TDS Calculation on Salary FY 2025-26
- CallMyCA – TDS Refund on Salary AY 2025-26
- Tax2win – TDS Calculation Formula
Quick FAQ (Straight Answers to Your “But Wait” Questions)
Q: TDS deducted even if income <₹5L? A: Shouldn’t – submit Form 15G/H. If yes, full refund via ITR.
Q: How to check if TDS matches? A: Compare Form 16 with 26AS on portal. Mismatch? Employer corrects it.
Q: Refund delayed? What to do? A: Track status; if >60 days, grievance on portal. Usually sorts quick.
Q: New regime – does it affect TDS refund? A: Yes – often bigger refunds due to higher exemption/rebate.
Disclaimer This is practical info based on rules as of November 22, 2025 – but your numbers vary. Always verify on incometax.gov.in and consult a CA for tweaks. We’re guiding, not advising. Claim smart, spend happy!