TDS on Salary: How Your Employer Calculates It

Your employer deducts TDS under Section 192 based on your estimated total income for the year. You submit investment declarations (rent receipts for HRA, Section 80C, 80D, 80E proofs) through the HR portal so the employer can apply deductions and compute tax on the lower taxable income. The employer issues Form 16 showing TDS deducted each quarter. The actual tax on your total income may differ — that is why you file a return and either pay self-assessment tax or claim a refund.