Period check: AY 2026–27 concerns FY 2025–26 under the 1961 Act. Tax Year 2026–27 concerns April 2026–March 2027 under the 2025 Act. Familiar old section names below are explanatory labels, not current filing references.
Salary TDS is a projected annual computation
Employers project taxable salary for the relevant income year, apply the applicable regime and eligible deductions, and account for tax already withheld. A calculator dividing annual tax by twelve is a planning average; it is not the exact remaining-month deduction when you join mid-year, receive a bonus or revise declarations.
Use the current reference
The Department identifies salary TDS under section 392(1) for the new Act. Earlier salary periods retain the old section 192 framework. Update declarations and software references while preserving old-period records. The new salary quarterly statement is Form 138; check the current utility and period when filing.
Declare eligibility, not an assumed saving
Under the ordinary new regime, many familiar old-regime investments and HRA exemptions are unavailable. Some specific deductions can remain available, so “no deductions whatsoever” is inaccurate. For the old regime, verify the deduction's own limit, conditions and supporting documents.
Employee choice and return filing
Communicate your intended payroll regime to the employer through its declaration process. Do not tell every salaried employee to file the business-income opt-out form with the employer. The return-filing route and ability to switch can depend on whether business income is present and on the applicable year's rules.
Reconcile before year end
Compare gross salary, exemptions, eligible deductions, previous-employer information and TDS already paid. Use the salary and TDS calculator for an annual scenario and the calendar for due dates. It is not correct to use one fixed “₹2 lakh deductions” break-even rule for every salary.
Official sources and scope
Source review: 2026-10-08. Check the relevant notification and your own records before filing or settling an entitlement.