Dear Sudha,
There are many components for calculating TDS on salary. First off all you have to check the salary structure which should comprises of Basic, HRA, Conveyance, Medical Allowance etc. There could be optional points as well like LTA, Re-imbursement Policy etc.
Presently upto Rs. 2.50 L salary in completely tax free. Above that before calculating the TDS, we need to consider the Deductions, Allowances, Benefits allowed by IT Dept.
There are 3 criteria for HRA Exemption. Check with your payroll.
Conveyance Allowance Exemption of Rs. 1600/pm is permisible for deduction
Medical Exemption is allowed Rs. 15000/pa
After making the above exemptions, you will have Gross Salary Income (For IT)
From the Gross Income, there are certain deduction towards Investment, Mediclaim, Donations, loans etc.
Under Section 80C Rs. 1.50 L deductions is allowed.
Interest on Housing Loan.
Mediclaim.-Rs. 15 k /pa
Education Loan
After considering the above there is a tax slab with different %.
If you want to reduce tax liability of employees, pls launch some re-imbursement policies.
The above is a short script of Tax Deductions, Allowance, etc. For detailed pls contact some payroll or Finance Team of your company.