Automating Payroll Tax Calculations: Inside PaySync

The TDS Projection Challenge

TDS isn't calculated on the month's salary alone — it's based on the projected annual income for the financial year. This means the TDS amount changes every month as new perks, bonuses, variable pay, or declarations are added.

Getting it wrong means employees either overpay (and wait for a refund) or underpay (and face a tax demand at year-end). Both outcomes damage trust.

How PaySync Handles It

At the start of each financial year, PaySync builds an income projection for every employee:

1. Static components: Basic salary, HRA, conveyance — fixed monthly

2. Declared investments: Employee submits 80C, 80D, HRA exemption claims via the self-service portal

3. Variable projections: Based on last year's bonus history and confirmed appraisals

4. Tax regime selection: Old vs New regime comparison generated for each employee; they choose

PaySync recalculates TDS every month as new data comes in — bonus payouts, revised declarations, mid-year appraisals — and tells you if any employee's monthly TDS needs to change.

New vs Old Tax Regime — Automated

From FY 2024-25, the New Tax Regime is the default. PaySync generates a side-by-side comparison for every employee at the start of the year. Employees choose via the self-service app. No manual data entry by HR.

Form 16 Generation

At year-end, PaySync generates Part A and Part B of Form 16 for every employee in bulk — pre-populated from the system data, reviewed, and dispatched digitally. What used to take an HR team two weeks now takes 30 minutes.