TDS or Tax Deducted at Source is a process by which a certain percentage of income is deducted as tax, which is subject to increase with the proportional increase in earnings.

Tax deduction Norms in India

Below is a list of deductions valid on gross salaries in India:

  • Housing Rent, if it’s more than one-tenth of income, subject to ceiling equivalent to Housing Rate Allowance
  • Savings, refunds on Housing Loan, tuition fee for 2 children, all of these taken together subject to a ceiling INR 100,000
  • Professional Tax
  • Savings on infrastructure bonds amounting up to INR 20,000
  • Home Loans interests subject to ceiling INR 1, 50,000
  • Other than the figure stated above (INR 100,000) INR 75,000- INR 100,000 for disability treatment, INR 15,000- INR 20,000 for mediclaim, INR 40,000- INR 60,000 for treatment of several Motor Neuron Diseases etc

How to calculate TDS?

Taxable Income = Gross salary- Total Deductions
Before getting a list of the income come tax rates for the financial year 2011-2012 (Assessment Year 2012-2013), it is imperative to know that tax payers in India are categorized in 3 groups namely, Senior Citizens (65 years and above), Male (Non Seniors) and Females (Non Seniors)

Total Income (per annum) Tax Rates
Total Income is more than INR 800000 INR 92000 + 30% of the amount by which total income exceeds INR 800000
Total Income is more than INR 500000 and less than or equal to INR 800000 INR 32000 + 20% of the amount by which total income exceeds INR 500000
Total Income is more than INR 180000 and less than or equal to INR 500000 10% of the amount by which total income exceeds INR 180000
Total income is less than or equal to INR 180000 Nil

Income Tax rates applicable when a resident of India is 80 years old or more during the financial year:

Total Income (per annum) Tax Rates
Total Income is more than INR 800000 INR 60000 + 30% of the amount by which total income exceeds INR 800000
Total Income is more than INR 500000 and less than or equal to INR 800000 20% of the amount by which total income exceeds INR 500000
Total income is less than or equal to INR 500000 Nil

Income Tax rates applicable for an individual who is 60 years or more but less than 80 years during a financial year:

Total Income (per annum) Tax Rates
Total Income is more than INR 800000 INR 85000 + 30% of the amount by which total income exceeds INR 800000
Total Income is more than INR 500000 and less than or equal to INR 800000 INR 25000 + 20% of the amount by which total income exceeds INR 500000
Total Income is more than INR 250000 and less than INR 500000 10% of the amount by which total income exceeds INR 250000
Total income is less than or equal to INR 250000 Nil

Income Tax rates for a female resident of India below 60 years during a financial year

Total Income (per annum) Tax Rates
Total Income is more than INR 800000 INR 91000 + 30% of the amount by which total income exceeds INR 800000
Total Income is more than INR 500000 and less than or equal to INR 800000 INR 31000 + 20% of the amount by which total income exceeds INR 500000
Total Income is more than INR 190000 and less than or equal to INR 500000 10% of the amount by which total income exceeds INR 190000
Total income is less than or equal to INR 190000 Nil

TDS – some other facts

Education Cess: The Income Tax will be higher with Education Cess— 2% of Income Tax.
Surcharge: Nil surcharges on individual tax payers’ Income Tax during the Assessment year 2012-2013.