**Excel** is the most widely used tool for dealing with massive datasets. We can perform myriads of tasks of multiple dimensions in **Excel**. In this article, I will explain how to perform a **TDS** deduction on salary calculation in **Excel** format.

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## 6 Steps for Deduction of TDS on Salary Calculation in Excel

**TDS**, or Tax Deducted at Source, is an amount deducted when a specific payment is made, such as a wage, commission, lease, interest, professional fees, and so on. The person making the payment deducts tax at the source, whereas the individual receiving the payment/income must pay the tax. It reduces tax fraud because the taxes are collected at the moment of payment.

Here, I will explain the process of **TDS** deduction on salary calculation in **Excel**. For simplicity, I have divided the process into **6** easy steps.*Please note that the detailed breakdown of the allowances and deduced amounts are absent here because it varies from country to country.*

### Step 1: Calculate Yearly Salary

Let’s assume that the monthly salary of a person is **Rs 70,000**. Now, I will **calculate the annual salary.**

- To do so, first, go to
**C8**and write down the following formula

`=C7*12`

- Then, press
**ENTER**to get the output.

**Read More: How to Calculate Basic Salary in Excel (3 Common Cases)**

### Step 2: Measure Total Taxable Income from Salary

The next step is to calculate the total taxable income from the salary.

Let’s assume that, other taxable income is **Rs 10,000, **and the deduction is **Rs. 2000**.

- Now, go to
**C11**and write down the following formula

`=C8+C9-C10`

- Then, press
**ENTER**to get the output.

**Read More:** **How to Calculate Income Tax on Salary with Example in Excel**

### Step 3: Calculate Tax on Taxable Income

The next step is to calculate the tax on the taxable income. The tax is calculated based on different slabs.

To calculate it,

- Go to
**C12**and write down the following formula

`=IF(C6<60,IF(C11>1000000,(((C11-1000000)*0.3)+112500),IF(C11>500000,(((C11-500000)*0.2)+12500),IF(C11>250000,(C11-250000)*0.05,0))),IF(C6>79,IF(C11>1000000,(((C11-1000000)*0.3)+110000),IF(C11>500000,(((C11-500000)*0.2)+0),0)),IF(C11>1000000,(((C11-1000000)*0.3)+110000),IF(C11>500000,(((C11-500000)*0.2)+10000),IF(C11>300000,(C11-300000)*0.05,0)))))`

**Formula Explanation**

- The 1st logical test is
**C6<60**which is**TRUE**. - So the corresponding output is
**IF(C11>1000000,(((C11-1000000)*0.3)+112500),IF(C11>500000,(((C11-500000)*0.2)+12500),IF(C11>250000,(C11-250000)*0.05,0)))** - The value of this output is
**82100**.

- Then, press
**ENTER**to get the output.

**Read More:** **How to Calculate Monthly Salary in Excel (with Easy Steps)**

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### Step 4: Measure Education Cess

The next step is to measure the education cess. The assumption is that the education cess is **2%** of the tax on total taxable income.

To calculate it,

- Go to
**C13**and write down the following formula

`=C12*2%`

- Then, press
**ENTER**to get the output.

**Read More:** **How to Calculate Gross Salary in Excel (3 Useful Methods)**

### Step 5: Calculate Tax Liability for Year

The next step is to calculate the yearly tax liability. For this step, I will use **the SUM function**. To calculate it,

- Go to
**C14**and write down the formula

`=SUM(C12:C13)`

- Then, press
**ENTER**to get the output.

**Read More:** **How to Calculate Net Salary in Excel (With Easy Steps)**

### Step 6: Measure Monthly TDS

The final step is to calculate the monthly **TDS**. To calculate it,

- Go to
**C15**and write down the following formula

`=C14/12`

- Then, press
**ENTER**to get the output.

**Read More:** **How to Create a Monthly Salary Sheet Format in Excel (with Easy Steps)**

## Things to Remember

- The tax is calculated based on different slabs.
- The breakdown of the allowances and deductions varies according to the different sections.

## Conclusion

In this article, I have explained how to perform a **TDS** deduction on salary calculation in **Excel** format. I hope it helps everyone. If you have any suggestions, ideas, or feedback, please feel free to comment below. Please visit **Exceldemy** for more useful articles like this.

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