For FY 2083/84 an employer deducts salary tax using one table for everyone: 1% on the first Rs 10 lakh of taxable income, then 10%, 20%, 27% and 29%. The 1% is not charged for an employee who contributes to the Social Security Fund (SSF) or an approved retirement fund, and SSF members' contributions (11% from the employee, 20% from the employer, on basic salary) reduce taxable income.
The salary tax table (FY 2083/84)
The same table applies to single people and couples. It applies from Shrawan 1, 2083 (17 July 2026).
| Annual taxable income | Rate | Tax on the band |
|---|---|---|
| Up to Rs 10,00,000 | 1% | Rs 10,000 |
| Rs 10,00,001 – 15,00,000 | 10% | Rs 50,000 |
| Rs 15,00,001 – 25,00,000 | 20% | Rs 2,00,000 |
| Rs 25,00,001 – 40,00,000 | 27% | Rs 4,05,000 |
| Above Rs 40,00,000 | 29% (27% + 2% additional) | — |
On Rs 60 lakh of taxable income the total is Rs 12,45,000, which is the figure the Inland Revenue Department shows.
The first 1% is the Social Security Tax. It is not charged on the income of a person who contributes to the contribution-based Social Security Fund or an approved retirement fund, on pension income, or for a sole proprietorship.
SSF contributions
For an employee enrolled in SSF, contributions are worked out on the basic salary:
- 11% from the employee, deducted from their pay
- 20% from the employer, on top of pay
- 31% in total, deposited with SSF for each month
Deductions that lower taxable income
- Retirement contributions (SSF, Citizen Investment Trust, an approved provident fund): up to Rs 5,00,000 or one-third of assessable income, whichever is lower.
- Life insurance premium: up to Rs 40,000 a year.
- Health insurance premium: up to Rs 20,000 a year.
- Insurance on your own private building: up to Rs 10,000 a year.
- Remote area allowance: Rs 50,000, 40,000, 30,000, 20,000 or 10,000 depending on the area's class (क to ङ).
A woman whose only income is salary gets a 10% rebate on the tax she has to pay.
Worked examples
1. Rs 50,000 a month, not in SSF
Rs 50,000 × 12 = Rs 6,00,000 taxable. At 1%, the tax is Rs 6,000 a year, so Rs 500 a month.
2. Basic salary Rs 1,00,000 a month, enrolled in SSF
- SSF each month: employee Rs 11,000, employer Rs 20,000.
- Income for the year, counting the employer's share: Rs 1,20,000 × 12 = Rs 14,40,000.
- Retirement deduction: the contributions are Rs 31,000 × 12 = Rs 3,72,000, which is under both Rs 5,00,000 and one-third of income (Rs 4,80,000), so all Rs 3,72,000 counts.
- Taxable income: Rs 10,68,000. The first Rs 10 lakh is not taxed for an SSF member; the next Rs 68,000 at 10% is Rs 6,800.
- About Rs 567 a month.
3. Rs 1,50,000 a month, not in SSF
Rs 18,00,000 taxable: Rs 10,000 + Rs 50,000 + Rs 60,000 = Rs 1,20,000 a year, Rs 10,000 a month. If she is a woman with salary as her only income, the 10% rebate makes it Rs 1,08,000, Rs 9,000 a month.
Deducting the right amount every month
Pay changes during the year, so a fixed twelfth of an early estimate drifts. The usual method is to estimate the whole year's taxable income from what has been paid so far plus the current salary for the months left, work out the year's tax, subtract what has already been deducted, and spread the rest over the remaining months.
Salary TDS is deposited with the Inland Revenue Department within 25 days after the end of each month.
How KhataIN helps
When you prepare a month's salary sheet in KhataIN, it suggests each employee's SSF and TDS, using the method above and the FY 2083/84 rates, and shows how every figure was worked out. You can change any amount before approving. The SSF contribution sheet, the salary TDS schedule and the bank transfer sheet come from the same approved sheet.
Rates are from the Inland Revenue Department's FY 2083/84 publication for natural persons. Check unusual cases, such as several employers or income besides salary, with your tax advisor.
Official documents
- Tax rates for natural persons, FY 2083/84 — Inland Revenue Department (saved copy)
- Section 11 exemptions and facilities, FY 2083/84 — Inland Revenue Department (saved copy)
- TDS rates on payments, FY 2083/84 — Inland Revenue Department (saved copy)