Bonus Tax Calculator

Yes — performance bonus, incentive bonus, signing bonus and festival bonus paid by an employer are fully taxable under Section 17 of the Income Tax Act. The bonus is added to regular salary for TDS computation, regardless of when paid (Q1, Q4 or annual).

Bonus TDS depends on the timing of payment. If the bonus is paid in the same month as salary, TDS aggregates on the full month's salary + bonus. If paid in a separate month (common with quarterly bonuses), TDS may push into a higher slab for that month, leading to over-deduction.

Cash gifts from employer are taxable under Section 17. Cash gifts from non-employer (e.g., festival gift from friend or relative) up to ₹5,000 are exempt; above ₹5,000 are fully taxable under Section 56. Use the bonus-type selector to apply the right rule.

Bonus (Performance Variable Pay) from an employer — listed, unlisted, private or government — is taxed as Salary under Section 17. Bonus from a partnership firm to partners is taxed differently (Section 28 — business income). Calculator assumes employee bonus unless specified.

No — bonus does not qualify for Section 80C deduction. Bonus is a current-year expense for the employer and a current-year income for the employee. EPF / NPS contribution by the employer on the bonus component may be eligible for Section 80CCD(2).

Basic salary + DA (without bonus) typically drive retirement benefits (gratuity, EPF, pension). Bonus is not added to the basic for these calculations. Calculator inputs use basic-only retirement basis — bonus is treated as a separate TDS event.