TDS and income tax · HivePayroll
Salary TDS worked out as a full-year estimate, revised every month, and filed from the same data.
Employees declare their own investments, see their own tax sheet and download their own Form 130 (Form 16). Payroll gets the quarterly position, challans, mapping and the Form 138 (Form 24Q) steps in order.
Salary TDS is a year-long calculation, not a monthly one
Tax deducted at source on salary is not a rate applied to a payslip. It is an estimate of the employee’s whole-year liability, divided across the remaining months, revised every time something changes: a declaration is submitted, an increment lands, someone joins in September with income from a previous employer.
What employees do themselves
Declarations that employees fill in themselves
Employees submit their own investment declarations, and payroll reviews them in one queue rather than in an inbox. The form filters what it offers by the employee’s tax regime, so someone on the new regime is not entering deductions that will never apply to them, which is where most of the back-and-forth in a declaration cycle comes from.
Every employee can see their own tax sheet
The whole computation: income, the declarations that have been accepted, the exemptions applied, the resulting liability and what has been deducted so far, with the tax regime clearly marked. An employee who can see why the deduction went up in January does not need to be told.
Flexible benefits and LTA
Where you run a flexible benefit plan, employees make their own selections and those flow into the tax computation. Leave travel allowance claims are made and evidenced by the employee rather than collected on a spreadsheet.
Both the old and the new regime are supported. Giving employees their tax sheet directly removes most of the questions payroll gets asked in Q4. See employee self-service.
The quarterly cycle
TDS compliance in HivePayroll follows the cycle you actually work to:
- Quarterly position: what has been deducted, what is due, and where the quarter stands
- Challans: recorded and reconciled against the deductions they cover
- Mapping: deductions matched to the challans that paid them, which is the part that makes a return file cleanly
- Filing: the quarterly salary TDS return steps (Form 138, called Form 24Q until 2025-26), worked through in order
Before you file: check the data
A Form 138 return fails for the same reasons a PF upload does: a missing PAN, most often. The statutory KYC check flags missing PAN, UAN and bank details across your employee master before the filing rather than after the rejection. See statutory compliance for the rest of that check.
Form 130 (Form 16) without a request queue
Employees download their own Form 130 (the annual TDS certificate called Form 16 until 2025-26) and their own payslips from their space, without asking anyone. For a payroll team, the difference between issuing Form 130 and publishing it is a week of email every year.
Frequently asked questions
Does HivePayroll support both the old and the new tax regime?
Yes. Both regimes are handled, the declaration form filters available deductions by the employee’s regime, and the tax sheet shows which regime a computation was run under.
Can employees submit their own investment declarations?
Yes. Employees submit from their own space and payroll reviews them in a single queue, rather than collecting them over email.
Does HivePayroll produce Form 130 (Form 16)?
Yes, and employees download it themselves alongside their payslips rather than requesting it from payroll.
What about Form 138 (earlier Form 24Q)?
The TDS module covers the quarterly position, challan recording, mapping deductions to challans, and the return filing steps for Form 138. Under the Income-tax Act, 2025, in force from 1 April 2026, Form 24Q became Form 138 and Form 16 became Form 130; returns and certificates for 2025-26 still use the old forms.
What happens when someone joins mid-year with previous employment income?
Salary TDS is computed as a full-year estimate and spread across remaining months, so a mid-year joiner’s liability is recalculated rather than starting from zero — which is what keeps a large correction out of March.
How do I avoid a rejected return?
Run the statutory KYC check first. It lists employees with a missing PAN, UAN or bank detail before you file, which is where most rejections originate.
See it on your own numbersAsk any payroll vendor to run one of your real employees end to end (declaration, computation, deduction, tax sheet) before you sign. Book a free demo, or see HivePayroll pricing. HivePayroll is free for up to 10 employees.
