TDS Calculator

What is TDS?

Tax Deduction at Source (TDS) is a system implemented by the tax authorities in India to collect taxes at the source of income. It is a method of collecting tax in advance by deducting a certain percentage of tax from the taxpayer’s income at the time of making payments.

Under the TDS system, certain categories of payments, such as salaries, interest, rent, commissions, etc., are subject to tax deduction at the time of payment. The person making the payment, known as the deductor, is responsible for deducting the applicable tax amount and remitting it to the government on behalf of the recipient, known as the deductee.

TDS serves as a mechanism to ensure a regular inflow of tax revenue for the government and promotes transparency in financial transactions. It also facilitates the collection of taxes from many taxpayers without burdening them with the entire tax liability at the end of the financial year.

What is the TDS Calculator?

A TDS calculator is an online tool that helps you calculate the tax deducted at source (TDS) amount on your income. It considers your income, your tax slab, and any deductions you may be eligible for.

The TDS calculator can be a helpful tool for several reasons:

1. It can help you to ensure that you are paying the correct amount of tax.
2. It can help you to budget for your tax payments.
3. It can help you to avoid penalties for underpayment of tax.

Using a TDS Calculator can help individuals and businesses ensure compliance with tax regulations and avoid any penalties or legal issues related to incorrect or insufficient TDS deductions. It simplifies determining the appropriate TDS amount, making it more efficient and accurate.

Formula to calculate TDS with example

The formula to calculate TDS is:

For example, let’s say you have an estimated income of ₹12,00,000 for the financial year. Based on the current tax slabs, your income tax payable is ₹1,42,500. So, your TDS will be:

TDS = (1,42,500 / 12,00,000) * 100 = 12.35%

Your employer will deduct ₹12,350 from your monthly salary as TDS.

How Can I Use the Akrivia HCM TDS Amount Calculator?

To use the TDS amount calculator, you will need to provide the following information:

1. Recipient type: This can be an individual, a company, or a HUF.
2. Payment amount: The amount of money being paid to the recipient.
4. Nature of payment: This can be salary, interest, rent, or other types of payments.

Once you have given this information, the calculator will calculate the TDS amount required to be deducted. The TDS amount will vary depending on the recipient type, the payment amount, and the nature of the payment.

1. Steps on how to use the TDS amount calculator:
2. Select the recipient type.
3. Enter the payment amount.
4. Select the nature of the payment.
5. Click on the “Calculate” button.
6. The calculator will display the TDS amount that is required to be deducted.

Benefits of using TDS calculator?

Some of the benefits of using a TDS calculator:

• It can help you to ensure that you are paying the correct amount of tax.
• It can help you to budget for your tax payments.
• It can help you to avoid penalties for underpayment of tax.