Which regime deducts less TDS from salary?

It depends on the employee's deductions: with substantial 80C, HRA and home-loan claims the old regime often wins; with few deductions the new regime's lower rates usually win. A dual projection answers it per person.

What is the Section 87A rebate?

A rebate that reduces tax to zero for taxpayers whose income falls under the regime's qualifying threshold — the projection applies it automatically where eligible.

When should employees submit investment declarations?

As early in the financial year as possible — the projection consumes them, and early declarations keep monthly TDS accurate instead of over-deducting.

Old vs new regime: how salary TDS is projected

Employers project each employee's annual tax to deduct TDS monthly. Under the old regime, deductions like Section 80C, HRA exemption and home-loan interest reduce taxable income; under the new regime, rates are lower but most deductions are unavailable. The Section 87A rebate, surcharge and cess apply per regime rules.

What the projection actually does

Payroll annualizes projected gross, subtracts the regime's allowed deductions (standard deduction; plus 80C, 80D, HRA exemption and Section 24(b) under the old regime), runs the slab math, applies the 87A rebate if income qualifies, adds surcharge and cess, then divides the remaining annual tax across remaining months as TDS.

Declarations decide the old-regime outcome

Old-regime TDS accuracy depends on employees declaring investments and rent early. Late or missing declarations inflate monthly TDS and produce refund-chasing at filing time.

How Flocci Work Suite does it

The TDS engine computes both regimes' projections with the full chain — standard deduction, declared 80C/80D/24(b), HRA exemption, 87A, surcharge, cess — consuming employee investment declarations filed through the self-service portal and reviewed by Finance.

Frequently asked questions

Which regime deducts less TDS from salary?: It depends on the employee's deductions: with substantial 80C, HRA and home-loan claims the old regime often wins; with few deductions the new regime's lower rates usually win. A dual projection answers it per person.
What is the Section 87A rebate?: A rebate that reduces tax to zero for taxpayers whose income falls under the regime's qualifying threshold — the projection applies it automatically where eligible.
When should employees submit investment declarations?: As early in the financial year as possible — the projection consumes them, and early declarations keep monthly TDS accurate instead of over-deducting.

Keep reading

Statutory rules summarized as of 2026-07-29. Rates and thresholds change — always confirm against the current EPFO, ESIC and Income Tax department notifications before filing.