Monthly TDS projections

A Monthly TDS Projection is the record of how much income tax a payroll run deducts from one employee in one pay period, and why. Every month the run estimates the employee's salary for the whole financial year, works out the year's tax under both the Old and the New regime, and spreads the tax that is still due over the months that remain. The projection keeps all of these figures. The run's TDS line then deducts the projection's Monthly Tds. The tax rules behind it (regimes, slabs, declarations) are explained in Income tax on salary. The deducted TDS is then deposited through the salary-TDS challan.

Overview

One projection per employee per payroll period. A run creates them for its period. If you run the projection again, the earlier projection for the same employee and period is replaced.
Created by the run. Project TDS and Calculate on a payroll run write the projections. Calculate always projects first, so the deduction always uses fresh figures.
Both regimes, one deduction. The projection stores the taxable income and annual tax under both regimes, which regime is cheaper and by how much. The deduction always follows the regime elected on the Employee record.
A review list. The On A Dearer Regime list view shows every employee whose elected regime costs them more tax than the other one.

When to use it

After Calculate, to check each employee's TDS before the run is approved and posted.
When an employee asks why their TDS changed. The projection shows the projected salary, the tax and what has already been deducted.
Before the declaration deadline, to find employees on the dearer regime and ask them to confirm their choice.
When TDS is zero or missing, to see whether a projection exists at all.

How xMatix handles it

For each employee of the run's company, the projection:

Picks the employees. It takes every Employee record of the run's company (Payroll Company or Partner Account) that has a Resource, is not Exited, and does not have TDS applicable explicitly unticked.
Finds the financial year. The year runs from April to March and is taken from the payroll period's End Date, for example 2026-27. The months remaining count the current month: April counts 12, October 6 and March 1.
Adds up the year so far. It totals the gross earnings and TDS of the employee's rows in every other payroll run of this financial year, for periods of the same company.
Projects the full-year salary. The monthly figure is the average gross of those earlier rows. With no earlier rows, it is the CTC of the employee's newest active compensation record, treated as a monthly amount. Projected Annual Gross = gross so far + monthly figure × months remaining. If this comes to zero, the employee gets no projection.
Collects the deductions. It reads the lines of the employee's Verified or Approved tax declarations for the same financial year. Each line uses its verified amount, or the declared amount when nothing is verified. Each claim is limited to its section's ceiling and to any shared cap group, and is dropped if the regime does not allow the section.
Works out the tax under both regimes. Standard deduction, slab tax, rebate, rebate marginal relief, surcharge with marginal relief and cess come from the financial year's tax rule tables. Taxable income and the tax are rounded to the regime's rounding unit.
Spreads what is left. Monthly TDS = (annual tax under the elected regime − TDS already deducted this year) ÷ months remaining, and never less than zero.
Saves the projection. Any earlier projection for the same employee and period is replaced.

The projection uses only salary and declarations. Section 10 exemptions such as HRA, the professional-tax deduction, perquisites, income from other sources, house-property income or loss and relief under section 89 are all treated as nil. There is also no date of birth to work from, so everyone is taxed in the general age band.

Prerequisites

Payroll periods with an End Date for the financial year, and a run with a payroll period and a company. See Payroll periods.
Tax rule tables for the financial year under both regimes: a Tax Regime Rule for Old and for New, plus their Salary Tax Slabs and Tax Surcharge Slabs. If either regime's Tax Regime Rule is missing, Project TDS and Calculate refuse the run with a message naming the tax year — see Setting up a tax year.
A TDS line on each salary structure. It must use a payroll component whose Statutory Type is TDS. Without that line, the projection is calculated and then not used. See Payroll components.
Employee records with the right Tax Regime and TDS applicable settings, and an active compensation record with a CTC.
Tax declarations for employees who claim deductions, in Verified or Approved status.

Procedure

Step 1 — Run the projection

Open the payroll run. See Running payroll.
Select Calculate. It projects TDS first and then calculates the run. To refresh only the projections, without recalculating, select Project TDS.

The run page shows Action Executed. Each employee who was projected now has one Monthly TDS Projection for the run's period. Employees who were skipped (Tds Applicable unticked, Exited, zero projected salary, or no rule tables for the year) get no new projection.

If you change a declaration, a regime election or a rule table after calculating, select Calculate again. Project TDS on its own refreshes the projections, but the employee rows keep the old TDS until the run is calculated again. A run that is posted, or whose payslips are published, cannot be recalculated.

Step 2 — Find an employee's projection

Open the Payroll app from the App Launcher and choose Settings.
Under Salary Tax (TDS), select Monthly TDS Projection.
Choose the All Monthly TDS Projection view, then search or filter by Resource, Payroll Period or Financial Year.

The list shows the name, Resource, Payroll Period, Financial Year, the projected figures, both regimes' tax and taxable income, the recommended regime, the saving, On Dearer Regime and the company. Each projection is named from the MTP series.

Step 3 — Read the projection

Open the projection. The header shows the company (Partner Account) and the employee (Resource). The Details tab has three panels:

Basic Information: Payroll Period and Financial Year.
Tax Details: Projected Annual Gross, Taxable Income, Projected Annual Tax, Monthly Tds and Revised After Proof. These are the figures for the regime that was applied.
Regime Comparison (Old vs New): Applied Regime, Tax If Old Regime, Tax If New Regime, Recommended Regime, Annual Saving, Taxable Income If Old, Taxable Income If New and On Dearer Regime.

To check Monthly Tds by hand, take Projected Annual Tax, subtract the TDS on the employee's rows in this year's earlier runs, and divide by the months remaining.

Step 4 — Review employees on the dearer regime

In the Monthly TDS Projection list, choose the On A Dearer Regime view. It lists projections where On Dearer Regime is ticked: the applied regime is not the recommended one and the saving is more than zero.
Filter by Payroll Period to see the current month only. The view shows every period.
For each person, compare Tax If Old Regime with Tax If New Regime and Annual Saving, and ask the employee to confirm their choice.
If the employee wants to switch, change Tax Regime on their Employee record. The next Calculate uses the new regime.

The projection only advises. It never changes the employee's election.

Step 5 — Correct a TDS amount

Fix the input, not the projection:

Find what is wrong: the employee's Tax Regime or TDS applicable, a declaration's status or amounts, the financial year's rule tables, or the earlier runs' rows.
Correct it at its source.
Open the payroll run and select Calculate again.

You can open a projection with Edit and change its figures, and the list has New. A hand-made or edited projection is still replaced the next time the run calculates. If the run is already posted, the TDS taken this month stays as it is. The next month's projection subtracts what was actually deducted, so the difference is spread over the remaining months.

Fields

Field	What it means	Notes
Name	The projection number	From the MTP series of the Monthly TDS Projection document-name setting.
Partner Account	The company of the run	Shown in the header.
Resource	The employee	Shown in the header. The run finds the projection by Resource and period.
Payroll Period	The period of the run that wrote it	The run reads only the projection for its own period.
Financial Year	The April-to-March year, such as 2026-27	Taken from the period's End Date. Rule tables and declarations must use the same text.
Projected Annual Gross	The estimated full-year salary	Gross so far this year + average monthly gross × months remaining. Uses CTC as the monthly figure when there are no earlier rows.
Taxable Income	Taxable income under the applied regime	After standard deduction and allowed declaration claims. Rounded to the rounding unit.
Projected Annual Tax	The year's tax under the applied regime	After rebate, marginal relief, surcharge and cess. The annual figure, not the month's deduction.
Monthly Tds	This month's deduction	(Annual tax − TDS already deducted) ÷ months remaining, never below zero.
Revised After Proof	Not used	Always unticked. Nothing sets it.
Applied Regime	The regime that produced Monthly Tds	`Old` only when the employee's Tax Regime is Old Regime. Blank or New Regime gives `New`.
Tax If Old Regime	The year's tax under the Old regime	For comparison.
Tax If New Regime	The year's tax under the New regime	For comparison.
Recommended Regime	The cheaper regime	`New` when both cost the same. Advisory only.
Annual Saving	The difference between the two regimes' tax	Zero when they are equal.
Taxable Income If Old	Taxable income under the Old regime	Can differ from the New figure because the regimes allow different deductions.
Taxable Income If New	Taxable income under the New regime
On Dearer Regime	The applied regime costs more	Ticked only when the applied regime differs from the recommended one and the saving is more than zero.

Business rules

One live projection per employee and period. Each projection run replaces the earlier projection for the same Resource and payroll period.
The deduction. When the run calculates, a structure line whose component has Statutory Type TDS takes Monthly Tds as its amount. The line's Min Amount and Max Amount still apply. If the line's component is proratable, the TDS is also reduced for loss-of-pay days.
No projection, no projected TDS. If an employee has no projection for the period, the TDS line is calculated like any other line, from its Calculation Type and Value. Keep the TDS line's Value at zero, so an employee without a projection has nothing deducted rather than a fixed amount.
Tds Applicable unticked. The employee is skipped, so no new projection is written. A projection that already exists for the same period is not removed, and the run still uses it.
Missing rule tables. If either regime's Tax Regime Rule for the financial year is missing or inactive, employees are skipped. An existing projection for the same period stays and is still used.
Year so far. The earlier gross and TDS come from the employee's rows in every other run of the financial year, whatever the run's status. A second run for the same period counts as an earlier month, so delete a duplicate run before you calculate.
Regime election. The deduction follows the Employee's Tax Regime. A blank election is taxed under the New regime.
Declarations. Only Verified or Approved declarations count, and only when their Financial Year matches exactly.
Rounding. Taxable income and annual tax are rounded to the regime's rounding unit. Monthly Tds is rounded to two decimals.
Name. The MTP document-name setting numbers each projection when it is created.

Example

An employee's pay is calculated every month from April. Each month's row shows gross earnings of ₹1,00,000 and TDS of ₹5,000. In October:

The payroll operator opens the October run and selects Calculate.
The projection finds six earlier rows (April to September): gross so far ₹6,00,000, TDS so far ₹30,000, an average of ₹1,00,000 a month.
October to March is six months, so Projected Annual Gross = ₹6,00,000 + ₹1,00,000 × 6 = ₹12,00,000.
The employee's Tax Regime is New Regime. Suppose your New regime rule tables give a Projected Annual Tax of ₹72,000 on this income.
Monthly Tds = (₹72,000 − ₹30,000) ÷ 6 = ₹7,000. The October row deducts ₹7,000.
The projection also shows Tax If Old Regime. If that is lower than the New regime tax, Recommended Regime is Old, On Dearer Regime is ticked and the employee appears in On A Dearer Regime.

Training

Practice exercise

In a sandbox company that has rule tables for the current financial year:

Calculate a payroll run for one employee with a TDS line on their structure.
Open the employee's Monthly TDS Projection and check that Monthly Tds equals the TDS on their run row.
Add a tax declaration for the same financial year with one line of a section the Old regime allows, and set it to Verified.
Change the employee's Tax Regime to Old Regime and select Calculate on the run again.

Expected result: the earlier projection has been replaced. The new one shows Applied Regime Old, a lower Taxable Income If Old, and a Monthly Tds that matches the recalculated row.

Quick reference

Path: Payroll → Settings → Salary Tax (TDS) → Monthly TDS Projection.
Calculate projects first. Project TDS refreshes projections only.
One projection per employee per period, replaced on every projection run.
Monthly Tds = (annual tax − TDS so far) ÷ months remaining.
The financial year comes from the period's End Date (April to March).
Only Verified or Approved declarations count.
The deduction follows the Employee's Tax Regime; blank means New.
On A Dearer Regime is the review list for regime choices.
Fix inputs and recalculate. Edited projections are replaced.

Permissions

Access is set in each security profile under Setup → Access Control → Profiles (see Security profiles).

See the list. The Monthly TDS Projection list is in the Payroll Settings area, which needs the payroll settings app on the profile. Of the seeded profiles, only SystemAdmin has it.
Read, create, edit and delete projections follow the entity permissions on Monthly TDS Projection. The seeded SystemAdmin, StandardUser and SalesExecutive profiles have full access. Projections hold salary and tax figures, so limit this to your payroll team before you go live.
Project TDS and Calculate are payroll-run actions with their own grants. See Running payroll.

Configuration

What	Where	Effect
Tax regime rules, salary tax slabs, surcharge slabs and deduction sections	Payroll → Settings → Salary Tax (TDS)	The tax under each regime. Both regimes need a Tax Regime Rule for the financial year, or nothing is projected. See Income tax on salary.
Tax declarations	Payroll → Settings → Salary Tax (TDS) → Tax Declaration	The deductions that reduce taxable income once they are Verified or Approved.
Tax Regime and Tds Applicable	The Employee record	Which regime is applied, and whether the employee is projected at all. See Employees.
TDS component and structure line	A payroll component with Statutory Type `TDS`, on each salary structure	Where Monthly Tds is deducted. Keep the line's Value at zero and its component not proratable. See Payroll components.
CTC	The employee's compensation record	The monthly figure for an employee with no earlier rows this year. See Salary structures.
Payroll periods	Payroll periods for the year, each with an End Date	The financial year and months remaining. See Payroll periods.
Numbering	Setup → Feature Hub → Platform → Document Settings → Monthly TDS Projection Document Setting (series MTP)	The projection number. See Email templates and document numbering.
Record page and list	The MonthlyTdsProjectionView layout, and the All Monthly TDS Projection and On A Dearer Regime views	Which fields and columns are shown. See Design a form layout.

Common problems

An employee has no projection for the month

Check, in this order: TDS applicable is unticked on their Employee record; their Employment Status is Exited; they have no earlier rows this year and no active compensation record with a CTC; the run has no payroll period or no company; or the financial year's Tax Regime Rule is missing for either regime. Fix the cause and select Calculate on the run again.

The run deducted a TDS amount different from Monthly Tds

The TDS line's Min Amount or Max Amount limited it, or its component is proratable and the employee had loss-of-pay days. Another cause is that you selected Project TDS after calculating but did not select Calculate again. Clear the limits or the proratable flag on the TDS line or component, then recalculate.

Employees with no projection still have TDS deducted

The structure's TDS line has a Value. Without a projection, the line is calculated from its own Calculation Type and Value. Set the Value to zero.

TDS jumped in a later month

The annual estimate went up, and the increase is spread over fewer remaining months. Common causes are a one-off payment that raised the average monthly gross, a declaration that dropped out because its status changed, or corrected rule tables. Compare this month's projection with last month's.

Year-to-date figures look doubled

The employee has rows in two runs for the same period. Every other run of the financial year counts, so both runs are added to the year so far. Delete the duplicate run and recalculate.

Declarations made no difference

Only Verified or Approved declarations with exactly the same Financial Year text count. Most deduction sections are not allowed under the New regime, and each claim is limited to its section ceiling and cap group.

I edited a projection and my change disappeared

Every Calculate replaces the employee's projection for the period. Correct the input instead (see Step 5).

Common questions

Why does the projection show both regimes?

Both regimes are calculated from the same income facts each month, so you can see which one costs the employee less without a separate calculation. Only the elected regime drives the deduction. Recommended Regime and Annual Saving tell you whether the employee would pay less under the other regime, and On Dearer Regime is ticked when they would. Use the On A Dearer Regime view to find these people, and change Tax Regime on the Employee record if they decide to switch.

Does the projection include HRA or professional tax?

No. The projection uses the projected salary and the verified declaration claims only. HRA and other section 10 exemptions, the professional-tax deduction, perquisites, other income, house-property income or loss and relief under section 89 are treated as nil. Under the Old regime, this can make the projected tax higher than the employee's actual liability, so the TDS deducted may be more than needed. Senior-citizen slabs are never applied, because there is no date of birth to work from.

What happens to an employee who joins mid-year?

In their first month there are no earlier rows, so the projection uses the CTC on their active compensation record as the monthly figure and multiplies it by the months remaining in the financial year. Salary from a previous employer is not included. From the second month, the average of the rows calculated so far is used.

Can I set an employee's TDS by hand?

Not durably. You can edit a projection, but the next Calculate on the run replaces it. To change the deduction, change what drives it: the regime election, the verified declarations or the rule tables. Then calculate the run again. An employee whose Tds Applicable is unticked gets no projection at all.