Bonus Tax

Calculate tax on your annual bonus or performance pay in India. Find net bonus after TDS and how it affects your total tax liability for the year.

Bonus Tax Calculator

Calculate TDS on bonus and net take-home after tax

Annual salary (excl. bonus) Rs 10,00,000
Rs
Bonus amount Rs 1,00,000
Rs
80C investments Rs 1,50,000
Rs
Tax regime New
Net bonus (after TDS)
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take-home
TDS on bonus
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tax deducted
Effective tax rate
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on bonus amount
Tax without bonus---
Tax with bonus---
Additional tax due to bonus---
Gross bonus---
Net bonus after TDS---

Approximate calculation based on slab rates. Actual TDS depends on total annual income and employer computation.

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ThriftRupee Insight

Your bonus is taxed at your marginal slab rate -- not a flat rate. A Rs 2 lakh bonus can push you from 20% to 30% slab, costing Rs 20,000 extra in tax compared to if it had come in the next financial year. Smart timing: if you are near a slab threshold in March, asking HR to credit the bonus in April (new FY) can save significant tax. Also, investing the bonus immediately in 80C instruments before year-end can reduce taxable income.

Bonus Tax Calculator India 2026

Calculate TDS on your annual bonus and net take-home. See how bonus pushes you into higher tax slabs and find the effective tax rate on your bonus amount.

Frequently asked questions

How is tax calculated on a bonus in India?▼
Bonus is treated as salary income and taxed at your applicable slab rate. If your regular salary already puts you in the 30% slab, your entire bonus is taxed at 30% (plus 4% cess = 31.2%). Your employer deducts TDS on the gross bonus at the time of payment. Formula: TDS on bonus = Bonus amount x Effective tax rate (based on annual income including bonus).
What is the statutory bonus in India?▼
The Payment of Bonus Act 1965 mandates a minimum bonus of 8.33% of basic salary (or Rs 100, whichever is higher) for employees earning basic up to Rs 21,000/month. Employees earning basic up to Rs 7,000/month or minimum wage (whichever is higher) get 8.33% minimum. Companies with profits may pay up to 20% as maximum bonus. Statutory bonus is fully taxable.
Can I reduce tax on my bonus?▼
Invest bonus immediately in 80C instruments (ELSS, PPF, NPS) before financial year end to reduce taxable income. Ask HR if timing can be deferred to next FY if you are near a slab threshold in February/March. Under old tax regime, 80C investments directly reduce bonus tax. Under new regime, fewer deductions are available -- consider switching regimes after including bonus in the calculation.

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