TDS on salary: tell your employer your tax regime

The Income Tax Department's FAQ on the two regimes is clear: yes, an employee has to tell the employer the intended tax regime during the year.

If you say nothing, it is presumed that you continue in the default tax regime, and the employer deducts tax at the new regime rates.

Telling your employer is not the same as opting out. To actually choose the old regime you must do it separately, before the due date of your return.

Example

Illustrative example only. You plan to use the old regime and never told HR. Your slip shows TDS at new regime rates all year. If you still pick the old regime in your ITR, the final tax is worked out there, and the difference shows up as tax payable or refund.

⚠️ Note

Non-business cases can change regime every year in the ITR, filed by the due date. Taxpayers with business income use Form 10-IEA and have tighter rules. The FAQ cites the Income Tax Act, 1961; section numbers change under the Income-tax Act, 2025.

Check it yourself

• ☐ Ask HR which regime they use for your TDS
• ☐ Look at the TDS line on your slip
• ☐ Decide before the year's last payrolls
• ☐ Keep your choice in writing

Salary slip format is ready, fill it in →

Source: incometax.gov.in, FAQs on New Tax vs Old Tax Regime.