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Bonus Tax Calculator

Enter your salary without the bonus and the bonus itself. A bonus is taxed as salary, so the tax on it is the difference it makes to your whole year's tax — which can be nothing at all, or far more than your usual rate if it pushes you past ₹12 lakh.

Tax year 2026-27, for resident individuals.

Gross salary for the year

Tax regime

Enter your salary and your bonus to see how much of the bonus you keep.

How to use this tool

  1. Enter your gross salary for the year, leaving out the bonus.
  2. Enter the bonus.
  3. Choose your tax regime. Under the old regime, enter your total deductions so the starting point is right.
  4. Read how much of the bonus you keep, and the extra tax it causes.

Formula and method

Tax on bonus = tax on (salary + bonus) − tax on salary

The bonus is added to your salary and the whole amount goes through the slabs, standard deduction, rebate and cess. The difference is the tax that belongs to the bonus.

Worked examples

₹8 lakh salary, ₹50,000 bonus, new regime

  1. Without the bonus: taxable ₹7.25 lakh — fully rebated
  2. With the bonus: taxable ₹7.75 lakh — still under ₹12 lakh, still rebated

No tax on the bonus at all: you keep the full ₹50,000.

₹12 lakh salary, ₹1 lakh bonus, new regime

  1. Without the bonus: taxable ₹11.25 lakh — no tax
  2. With the bonus: taxable ₹12.25 lakh — marginal relief limits tax to the ₹25,000 above ₹12 lakh
  3. Plus 4% cess: ₹26,000

You keep ₹74,000 — the bonus is taxed at an effective 26%, well above the 10–15% slabs it falls in.

₹30 lakh salary, ₹1 lakh bonus, new regime

  1. The whole bonus falls in the 30% slab
  2. 30% × 1,00,000 = 30,000, plus 4% cess

₹31,200 of tax; you keep ₹68,800.

Notes and limitations

  • A bonus is taxed in the year it becomes due or is paid, whichever is earlier — not necessarily the year the work was done.
  • Employers deduct TDS on a bonus at your average rate for the year, so the amount credited may not match this figure exactly; the difference is settled when you file your return.
  • Surcharge above ₹50 lakh is included through the income tax calculation. Deductions under the old regime are taken as one total here; use the income tax calculator for a full breakdown.

Frequently asked questions

How is a bonus taxed in India?

As salary. It is added to the rest of your income for the year and taxed at your slab rates, after the standard deduction and any rebate. There is no special or flat rate for bonuses.

Why was so much TDS deducted from my bonus?

Because your employer spreads the year's estimated tax across the remaining salary payments, and the bonus raises that estimate. If more was deducted than you owe for the year, you get the difference back as a refund when you file.

Can a small bonus cost more in tax than it is worth?

Under the new regime marginal relief prevents that: just above ₹12 lakh, your tax cannot exceed the income above ₹12 lakh. But the effective rate on the bonus can still be high, as the second example shows.

Is a Diwali gift from my employer taxed like a bonus?

A cash gift is salary and taxed like a bonus. Small non-cash gifts can be tax-free up to a limit; check your salary slip for how your employer has treated it.

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