TDS & Income Tax
Omnivoo deducts Tax Deducted at Source (TDS) from your monthly salary as required under Section 192 of the Income Tax Act 1961. This guide explains how TDS works, the difference between the two tax regimes, and how to reduce your monthly deduction.
What Is TDS?
TDS is income tax deducted by the employer from your salary before paying you. Instead of paying your entire tax liability at year-end, it is spread across the months of the financial year. Omnivoo deposits TDS with the government on your behalf.
Tax Regimes: Old vs New
India offers two tax regimes. The New Tax Regime is the default. You choose your regime on your investment declaration, and it is used for your TDS computation.
New Tax Regime (default)
These are the slabs used for FY 2025-26 (AY 2026-27), updated per Union Budget 2025:
| Taxable Income | Tax Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 - ₹8,00,000 | 5% |
| ₹8,00,001 - ₹12,00,000 | 10% |
| ₹12,00,001 - ₹16,00,000 | 15% |
| ₹16,00,001 - ₹20,00,000 | 20% |
| ₹20,00,001 - ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
- Standard deduction of ₹75,000.
- Section 87A rebate: if your taxable income is ₹12,00,000 or less, the rebate (up to ₹60,000) cancels out your tax, so your tax works out to nil.
- No other deductions under 80C, 80D, HRA exemption, etc. (a few specific reliefs such as the 80CCD(2) employer NPS contribution still apply).
- Simpler, lower rates. Usually best if you do not have significant investments or rent.
Old Tax Regime
| Taxable Income | Tax Rate |
|---|---|
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 - ₹5,00,000 | 5% |
| ₹5,00,001 - ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
- Standard deduction of ₹75,000.
- Section 87A rebate: full rebate (up to ₹12,500) if your taxable income is ₹5,00,000 or less.
- All deductions available: 80C (₹1,50,000), 80D (health insurance), HRA exemption, home loan interest (Section 24), NPS (80CCD(1B)), and more.
- Best if you have significant tax-saving investments and pay rent.
You set your tax regime as a toggle inside your Investment Declaration form. New Regime is selected by default. You can change it whenever you update your declaration, and Omnivoo recalculates your TDS accordingly.
How Omnivoo Calculates Monthly TDS
- Project annual income: Monthly gross salary x 12 (plus any known one-time arrears or bonuses).
- Apply standard deduction: ₹75,000.
- Apply HRA exemption: (Old regime only) based on your rent and salary, if you declare rent.
- Subtract declared deductions: (Old regime only) 80C, 80D, 80E, and the other Chapter VI-A sections from your investment declarations.
- Calculate tax on the slabs: Apply the regime's slab rates to your taxable income.
- Apply the Section 87A rebate: Reduces tax to nil if you are within the rebate threshold (₹12,00,000 new regime, ₹5,00,000 old regime).
- Add cess: 4% Health and Education Cess on the tax after rebate.
- Divide across the year: Monthly TDS = annual tax / 12.
As the year progresses, Omnivoo recalculates to account for actual salary paid and any changes in your declarations.
Form 16
After the financial year ends (after March 31), your employer generates Form 16 for you:
- Part A: TDS certificate that confirms tax deposited with the government.
- Part B: Detailed computation of income, deductions, and tax.
Form 16 is generated by your employer through Omnivoo. Until it is generated, Form 16 shows as Coming Soon on your Tax Documents page. Once available, you can download it there. You need it to file your personal income tax return. See Tax Documents.
Quarterly TDS Returns (24Q)
Employers report salary TDS to the Income Tax Department every quarter on Form 24Q:
| Quarter | Period | Due |
|---|---|---|
| Q1 | April - June | July 31 |
| Q2 | July - September | October 31 |
| Q3 | October - December | January 31 |
| Q4 | January - March | May 31 |
Omnivoo prepares the 24Q data and supporting records so this filing is managed for you. Employees do not need to take any action for 24Q.
Reducing Your TDS
If you are on the Old Tax Regime, you can reduce your monthly TDS by submitting investment declarations. The more eligible deductions you declare, the lower your monthly TDS.
Common deductions: Section 80C (PPF, ELSS, EPF), Section 80D (health insurance), HRA exemption (rent payments), Section 80E (education loan interest), NPS contributions.
On the New Tax Regime, most deductions do not apply, so declaring investments will not change your TDS (the standard deduction and 87A rebate are applied automatically).