Why an Income Tax Calculator May Differ From Payroll TDS

Annual tax estimate and payroll withholding are different processes

The calculator estimates annual tax from the taxable ordinary income and regime entered. Payroll TDS is tax deducted by an employer at payment based on estimated salary income for the financial year and information available to payroll. One payslip's deduction therefore need not equal one-twelfth of this calculator's annual result.

A difference by itself does not prove that either figure is wrong. Compare the assumptions, period, regime, income included and tax already deducted.

Why payroll estimates can change during the year

• Salary changes, bonus timing, arrears and taxable perquisites can change the employer's projection.
• Declarations and later proof submission can change claims reflected in payroll.
• Previous-employer salary and TDS affect the estimate when the employee supplies those details.
• Other income reported to the employer and the regime applied can change the calculation.
• Section 192 permits adjustment of an earlier excess or deficiency during the financial year.

What to compare before treating a difference as an error

Check whether both figures use FY 2025–26, the same regime and the same annual income assumptions. Review salary changes, bonus, arrears, perquisites, declarations, proof status, previous-employer details, other income reported to payroll and TDS already deducted.

Form 16 reports salary information and tax deducted after the financial year. A current payslip is a point within an evolving annual withholding process, not a completed return computation.

The calculator does not simulate payroll

It does not generate monthly TDS, an employer withholding schedule or a payslip. It does not account for TDS already deducted, proof workflows, payroll adjustments or employer-specific timing. Its output does not replace payroll records or the final filing computation.