Bonus Tax Calculator India 2026
Calculate tax deducted from your bonus and find your actual in-hand bonus amount. Compare old vs new tax regime.
Bonus details
Gross bonus amount before tax
Your existing annual salary
In-hand bonus (after tax)
₹0
You receive 0.0% of gross bonus
Bonus breakdown
Tax slab impact
Before bonus
After bonus
Annual tax impact
Bonus composition
How to reduce tax on your bonus
Old regime (with deductions)
- ✓80C: Invest in PPF, ELSS, Life Insurance (max ₹1.5L)
- ✓NPS: Extra ₹50K deduction under 80CCD(1B)
- ✓80D: Health insurance premiums (up to ₹50K)
- ✓Home loan: Interest deduction under 24(b)
New regime (no deductions)
- ✓Lower slab rates overall
- ✓No forced investments required
- ✓Better for incomes above ₹15L with few deductions
- ✓Simpler tax filing
How bonus tax works in India
Bonus is taxed as salary income — there is no separate "bonus tax rate" in India. When your employer pays a bonus, they add it to your projected annual income for the year and deduct TDS under Section 192 at the slab rates that apply to that combined figure.
The key thing to understand is the marginal rate concept. If your salary alone keeps you in the 20% slab but the bonus pushes part of your income above ₹10 lakh (old regime), only that excess portion gets taxed at 30%. The rest stays at the lower slab. This calculator shows exactly which portion of your bonus falls where.
Worked example
Say your annual salary is ₹12 lakh and you receive a ₹1 lakh performance bonus in November. Under the new regime for FY 2025-26, your total income is ₹13 lakh. Tax on ₹12 lakh was already ₹83,200 (including 4% cess). Tax on ₹13 lakh comes to ₹97,760. The incremental tax on the ₹1 lakh bonus is ₹14,560 — an effective rate of 14.56%, not 30%. You take home ₹85,440 of the bonus.
Under the old regime with full ₹1.5 lakh in 80C and ₹50,000 NPS deduction, the same bonus might cost slightly less in tax — the calculator handles both scenarios so you can compare directly.
When your bonus pushes you to a higher slab
People often worry that receiving a bonus will result in all their income being taxed at the higher rate. That is not how slab taxation works. Only the amount above the threshold moves to the higher slab. If your taxable income was ₹9.8 lakh and your bonus adds ₹1 lakh, only ₹80,000 of the bonus gets taxed at the 15% slab (new regime) — the first ₹20,000 fills up the 10% band. The "Tax slab impact" card in the calculator above shows the before and after positions clearly.
Old regime vs new regime for bonus
The new regime default (FY 2025-26) has lower slab rates but allows almost no deductions. The old regime lets you claim 80C, 80D, NPS, home loan interest, and more — but the slab rates are higher. For most salaried people earning between ₹7 lakh and ₹15 lakh without significant deductions, the new regime often results in lower overall tax. Use this calculator to check both scenarios against your actual deduction profile.
For a deeper look at tax planning beyond the bonus, see our income tax calculator which handles salary, rental income, and capital gains together, or read the income tax planning guide for 2026.
Frequently asked questions
Is bonus taxed at a higher rate than salary?
No. Bonus is taxed as salary at your applicable slab rates — there is no separate bonus tax. If the bonus moves you into a higher slab, only the amount above the threshold faces that higher rate.
How does TDS on bonus work?
Your employer adds the bonus to your projected annual salary and deducts TDS under Section 192 at the relevant slab rates. A one-time large bonus often triggers 30% TDS as a conservative estimate. Any excess TDS can be reclaimed via ITR.
Can I reduce tax on bonus?
You cannot avoid tax on bonus, but deductions under 80C (up to ₹1.5 lakh), NPS under 80CCD(1B) (₹50,000 extra), and 80D (health insurance) in the old regime can lower your taxable income. Run both regimes in this calculator to find which gives you a better outcome.
What if my employer deducted 30% TDS on the bonus?
If your actual tax liability is lower, you will get a refund when you file your ITR. The refund is processed by the income tax department and credited to your bank account — typically within 2-3 months of filing.
Do I need to show bonus in my ITR?
Yes. Bonus is part of salary income and will appear in your Form 16. It gets pre-filled in your ITR automatically. Not disclosing it can attract notices under Section 139(9) or 143.