How to use the Bonus Tax Calculator
- Enter your annual salary without the bonus.
- Enter the bonus amount.
- Choose your tax regime.
- See the tax on the bonus and your net bonus.
How bonus is taxed in India
Performance bonus, joining bonus, retention bonus and incentives are all part of salary income. The tax on a bonus is the extra tax you pay because your total income goes up. That is why this calculator works out your tax with and without the bonus.
Watch out for the ₹12 lakh mark in the new regime: if a bonus pushes your taxable income just over ₹12 lakh, marginal relief limits the extra tax to the amount above ₹12 lakh.
Frequently asked questions
Is bonus taxed at a higher rate?
No, there is no separate rate. The bonus is added to your income and taxed at your slab rate, which can make the effective tax on the bonus higher than your average tax rate.
Is Diwali bonus taxable?
Yes. Any cash bonus from your employer is taxable as salary. Gifts in kind up to ₹5,000 a year are tax-free.
Why did my employer deduct so much TDS on my bonus?
Employers recalculate your full-year tax when a bonus is paid and deduct the extra tax from that month's pay, so TDS in the bonus month is higher.
These tools give estimates for general guidance and are not financial or tax advice. Rates and rules can change; check official sources before making decisions.