There's a persistent myth that bonuses are taxed at a higher rate than regular salary — they're not. A bonus is simply added to your total income for the year and taxed at your normal slab rates, just like any other salary component.
What actually happens, and what fuels the myth, is that employers often deduct a disproportionately large chunk of TDS from the specific month a bonus is paid, since payroll systems typically annualise your income including the bonus and adjust that month's TDS to catch up, rather than spreading the impact evenly across the year.
This means your take-home pay in the bonus month can look much lower than expected, even though your total annual tax liability hasn't actually increased beyond what it would have been anyway — the tax was simply front-loaded into that one payslip rather than smoothed across twelve.
If your total income including the bonus pushes you into a genuinely higher tax slab for the year, that portion is taxed at the higher rate — but only the portion above the slab threshold, following the same progressive structure as your regular salary, not the bonus amount as a whole.
Frequently asked questions
What is a salary calculator with old vs new regime comparison?
It takes your gross annual salary and computes your income tax liability under both the old and new tax regimes side by side, factoring in standard deduction, applicable slabs, cess, and rebates, so you can see which regime results in lower tax for your specific numbers.
What is the key difference between the old and new tax regimes?
The old regime has fewer, wider slabs but allows numerous deductions and exemptions like 80C, HRA, and home loan interest, while the new regime offers lower slab rates and a larger tax-free threshold but removes almost all deductions except the standard deduction.
Which regime is the default now?
The new tax regime is the default option for all taxpayers; if you want to be taxed under the old regime with its deductions, you must explicitly opt for it, either when filing your return or by informing your employer for TDS purposes.