Bonus in November: why your TDS jumps

Short answer

1. A bonus is taxable as salary in the year you get it.
2. Your employer cuts TDS on your estimated income for the whole year.
3. The bonus raises that estimate. So the tax for the year goes up.
4. Most of the year is already over. So the extra tax falls on fewer months.
5. That is why November TDS jumps.

If too much is cut, you get it back as a refund when you file your ITR.

The rule: section 392

From 1 Apr 2026, salary TDS is under section 392 of the Income-tax Act, 2025 (old section 192).

• The employer deducts tax at the time of payment.
• It uses the average rate of income-tax on your estimated income for the tax year.
• The employer can increase or reduce later deductions to adjust any excess or shortfall in the same year.

So when your estimated income changes in November, the TDS for November to March changes.

Tax slabs for tax year 2026-27

New regime (section 202) — the default

• Standard deduction: ₹75,000 where tax is computed under section 202(1). Otherwise ₹50,000.
• Rebate (section 156): up to ₹60,000 if income under section 202(1) is up to ₹12,00,000. Just above ₹12,00,000, marginal relief applies.

Old regime (below 60 years)

These are the rates in Paragraph A of Part III of the First Schedule to the Finance Act, 2026. They are the rates for deducting tax on salary under section 392.

• Standard deduction: ₹50,000 (section 19, when tax is not computed under section 202(1)).
• Rebate: up to ₹12,500 if total income is up to ₹5,00,000.

Both regimes: add 4% Health and Education Cess on the tax.

These examples have no surcharge. Surcharge applies only at higher incomes.

Worked example 1: ₹15 lakh salary, ₹1.5 lakh bonus

Salary is ₹1,25,000 a month. That is ₹15,00,000 a year. There is no other income and no deduction apart from the standard deduction. In November a ₹1,50,000 bonus is paid.

New regime

Before the bonus (April to October):

1. Salary ₹15,00,000 − standard deduction ₹75,000 = ₹14,25,000
2. Tax: 5% of ₹4,00,000 = ₹20,000. 10% of ₹4,00,000 = ₹40,000. 15% of ₹2,25,000 = ₹33,750.
3. Total = ₹93,750. No rebate (income is above ₹12 lakh).
4. Cess 4% = ₹3,750. Tax for the year = ₹97,500.
5. Monthly TDS = ₹97,500 ÷ 12 = ₹8,125.

After the bonus:

1. Income = ₹16,50,000 − ₹75,000 = ₹15,75,000
2. Tax: ₹20,000 + ₹40,000 + 15% of ₹3,75,000 (₹56,250) = ₹1,16,250
3. Cess 4% = ₹4,650. Tax for the year = ₹1,20,900.
4. Extra tax because of the bonus = ₹1,20,900 − ₹97,500 = ₹23,400.

What happens to November TDS (one common way):

1. TDS already cut, April to October: 7 × ₹8,125 = ₹56,875.
2. Tax still due: ₹1,20,900 − ₹56,875 = ₹64,025.
3. Spread over November to March (5 months): ₹64,025 ÷ 5 = ₹12,805 a month.

So monthly TDS goes from ₹8,125 to ₹12,805.

Some employers instead cut the full extra ₹23,400 in November. Then November TDS = ₹8,125 + ₹23,400 = ₹31,525. The total for the year is the same.

Old regime (same salary, only standard deduction)

Before the bonus:

1. Salary ₹15,00,000 − ₹50,000 = ₹14,50,000
2. Tax: 5% of ₹2,50,000 = ₹12,500. 20% of ₹5,00,000 = ₹1,00,000. 30% of ₹4,50,000 = ₹1,35,000.
3. Total = ₹2,47,500. Cess 4% = ₹9,900. Tax for the year = ₹2,57,400.
4. Monthly TDS = ₹21,450.

After the bonus:

1. Salary + bonus = ₹16,50,000. Minus ₹50,000 = ₹16,00,000.
2. Tax: ₹12,500 + ₹1,00,000 + 30% of ₹6,00,000 (₹1,80,000) = ₹2,92,500
3. Cess 4% = ₹11,700. Tax for the year = ₹3,04,200.
4. Extra tax because of the bonus = ₹46,800.

November TDS (spread way):

1. Cut April to October: 7 × ₹21,450 = ₹1,50,150.
2. Still due: ₹3,04,200 − ₹1,50,150 = ₹1,54,050.
3. ÷ 5 months = ₹30,810 a month.

Note: In this example the old regime costs more, because there is no HRA or other deduction. With HRA and deductions, the old regime can come out lower. Compare in our Income tax calculator.

Summary

Worked example 2: from zero TDS to TDS (the ₹12 lakh line)

Salary is ₹1,00,000 a month = ₹12,00,000 a year. New regime.

Before the bonus:

1. ₹12,00,000 − ₹75,000 = ₹11,25,000.
2. This is up to ₹12,00,000. The rebate wipes out the tax.
3. Tax = Nil. TDS = Nil.

After a ₹1,00,000 bonus:

1. ₹13,00,000 − ₹75,000 = ₹12,25,000.
2. Slab tax = ₹20,000 + ₹40,000 + 15% of ₹25,000 (₹3,750) = ₹63,750.
3. Marginal relief: income is only ₹25,000 above ₹12,00,000. So tax is limited to ₹25,000.
4. Cess 4% = ₹1,000. Tax for the year = ₹26,000.

There was no TDS from April to October. Now ₹26,000 is due in 5 months: ₹5,200 a month (spread way). Or ₹26,000 in November if the employer cuts it at once.

This is why some people see TDS for the first time in November.

Too much TDS cut? You get it back

1. Check your payslips and the employer's annual TDS certificate.
2. Check Form 26AS / AIS on the income tax portal. Make sure the TDS shows.
3. File your ITR for tax year 2026-27.
4. If total TDS is more than your final tax, the extra comes back as a refund.

Common reasons for a refund:

• You declared proofs late. The employer cut TDS without them.
• You change regime in the ITR. Under section 202, a person with no business income can opt out of the new regime with the return of income.
• The bonus or salary was lower than the employer estimated.

How to keep November TDS in check

1. Tell your employer your regime early. It changes the estimate.
2. Submit Form 124 proofs on time (old regime): rent, home loan, deductions. See our Form 124 guide.
3. Changed jobs this year? Give your previous employer's income and TDS in Form 122. Else both employers may under-cut, and you pay a lump sum at ITR time.
4. Check the November payslip. Ask HR how they spread the bonus tax.

Official sources

• Section 392 (salary TDS), Income-tax Act, 2025
• Section 202 (new regime), Income-tax Act, 2025
• Income-tax Act, 2025 as amended by the Finance Act, 2026 (PDF). Section 19 standard deduction.
• FAQs on computation of tax (rebate under section 156, cess)
• Finance Act, 2026 (PDF). Part III salary-TDS rates and 4% cess.
• Income from salary (bonus taxable as salary)
• Form 124 FAQs (Form 122 for previous employer)