How much tax on a Diwali bonus?

A Diwali bonus is part of your salary, so it is added to the year’s pay and taxed at the slab rate where it lands; there is no separate bonus rate. On the new regime in FY 2026-27, a ₹1,00,000 bonus adds ₹15,600 of tax to a ₹15 lakh salary. Near the rebate line it costs more: ₹50,000 on a ₹12,50,000 salary takes the year to ₹13,00,000 and the tax from nil to ₹26,000.

A bonus is salary, taxed with the rest of it

A bonus your employer pays, whether it is called a Diwali, festival or performance bonus, is counted as salary for the tax year, alongside basic pay and allowances. A bonus paid this Diwali falls in tax year 2026-27, which runs from 1 April 2026 to 31 March 2027.

So there is no bonus rate to look up. The tax on a bonus is the year’s tax with it minus the year’s tax without it, worked on the same slabs, the same standard deduction and the same rebate as the rest of your salary. The calculator below does exactly that on whatever salary you type in.

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

The extra tax on a ₹1 lakh bonus, salary by salary

Illustrative salaries, gross for the year before the bonus, with nothing claimed beyond each regime’s standard deduction. On the new regime, ₹8 lakh and ₹10 lakh salaries pay nothing on a ₹1,00,000 bonus, because the year still ends inside the rebate. At ₹15 lakh the bonus adds ₹15,600, at ₹20 lakh ₹22,100 and at ₹30 lakh ₹31,200.

The largest figures are not at the top of the table. On a ₹12,50,000 salary the same bonus adds ₹74,100, and on ₹13,00,000 it adds ₹55,900, because those are the salaries where the bonus carries the year across the rebate line. The next section shows why.

Why a bonus near ₹12 lakh costs so much

On the new regime, the Section 87A rebate cancels all tax while taxable income is within ₹12,00,000, which on salary alone is a gross of up to ₹12,75,000 after the ₹75,000 standard deduction. A ₹12,00,000 salary can take a bonus of up to ₹75,000 with no new-regime tax at all.

Just past that line, marginal relief limits the tax before cess to the taxable income above ₹12,00,000. That is why ₹50,000 on a ₹12,50,000 salary costs ₹26,000: the year moves from nil to ₹13,00,000, where the tax is ₹25,000 of relief-limited tax plus ₹1,000 of cess. Further up, the relief runs out and every slab applies in full. ₹50,000 on a ₹13,00,000 salary takes the tax from ₹26,000 to ₹74,100, so ₹48,100 of the ₹50,000 goes in tax.

Past the strip the cost falls back to the slab rate: the same ₹50,000 on a ₹15,00,000 salary adds ₹7,800. None of this is a penalty on bonuses. A pay rise of the same size has exactly the same effect, because the engine only sees the year’s total.

On the old regime the cost is flatter

The old regime has no ₹12 lakh rebate, so a bonus is simply taxed at the slab it falls in. With nothing claimed, ₹1,00,000 of bonus adds ₹20,800 on an ₹8 lakh salary, where it sits in the 20% slab, ₹26,000 on ₹10 lakh, where it straddles 20% and 30%, and ₹31,200 on every salary from ₹12 lakh up, where all of it is taxed at 30% plus cess.

Which regime is lower for your year as a whole depends on what you can claim under the old one; the old-versus-new guide and the calculator below work that out. Whichever regime you are on, the bonus is taxed in it.

How the extra tax reaches your payslip

Your employer deducts income tax from salary on its estimate of your income for the whole year. A bonus raises that estimate, so the year’s deductions rise by the extra tax shown above. Whether it comes out of the bonus payment itself or is spread over the months left in the year is up to the employer’s payroll; the total for the year is the same.

If tax deducted during the year falls short of the year’s tax, or goes over it, the difference is settled when you file your return.