Income Tax on ₹1L-₹2L Monthly Salary, Bonus & Other Earnings in India 

Are you taking home ₹1-2 lakhs salary every month but feeling confused about how much the tax department will claim? You’re not alone. Tax rules in India can be tricky to understand, especially when you earn a good salary plus bonuses or have other income streams.

Let’s cut through the confusion and figure out your real take-home pay.

How Much Tax I Have to Pay for ₹1 lakh-₹2 Lakh Monthly Salary in India?

If you earn between ₹1-₹2 lakh every month, your annual income ranges from ₹12 lakh to ₹24 lakh.

Now, you have two options: an old or new tax regime. The new tax regime, introduced in Budget 2020, offers lower tax rates but no major deductions or exemptions. You only get a standard deduction of ₹75,000, rebate of ₹60,000 (If total income does not exceed 12 lakh) and Section 80CCD(2) – Employer’s NPS Contribution of up to 14% of basic salary. 

In contrast, the old tax regime has higher tax rates but lets you claim popular deductions like 80C (up to ₹1.5 lakhs per financial year), standard deduction of ₹50,000, HRA, LTA, etc.

First, let’s calculate tax on 1 lakh salary per month (₹12 lakh/year) under both regimes, assuming you only claim ₹1.5L (80C) deduction.

1. How Much Tax for 1 Lakh Salary Per Month? 

Here’s a detailed breakdown of per month 1 lakh tax in India under both regimes for FY 2025-26. 

	Old Regime (amount in ₹)	New Regime (amount in ₹)
Gross Salary	12,00,000	12,00,000
Less: Standard Deduction	50,000	75,000
Gross Total Income	11,50,000	11,25,000
Less: Eligible Deductions (80 C)	1,50,000	–
Net Taxable Income	10,00,000	11,25,000

Tax under the old regime:

Income Tax Slabs (FY 2025-26)	Rate of Tax	Tax (₹)
₹0 to 2.5 Lakh	Nil	0
₹2.5 – 5 Lakh	5%	2.5L × 5% = 12,500
₹5 – 10 Lakh	20%	5L × 20% = 1,00,000
Total Tax Before Cess		1,12,500
Health and Education Cess @4%		4,500
Total Tax Payable		1,17,000

This is the income tax for 1 lakh per month in India under the old regime.

Tax under the new regime: 

Income Tax Slabs (FY 2025-26)	Rate of Tax	Tax
₹ 0 – 4 Lakh	NIL	0
₹ 4 – 8 Lakh	5%	4L x 5% = 20,000
₹ 8 – 12 Lakh	10%	3.25L x 10% = 32,500
Total Tax Before Cess		52,500
Rebate		60,000
Total Tax Payable		0

This is your income tax on 1 lakh salary per month under the new regime. So, if you opt for the new regime, you can save ₹1,17,000 in taxes. This gives a good idea of how much tax on 1 lakh rupees you’ll pay depending on your chosen tax regime.

2. Tax on 2 Lakh Salary Per Month (₹24 lakhs) 

	Old Regime (amount in ₹)	New Regime (amount in ₹)
Gross Salary	24,00,000	24,00,000
Less: Standard Deduction & Eligible Deductions	2,00,000	75,000
Net Taxable Income	22,00,000	23,25,000
Total Tax Liability (including cess)	4,91,400	2,92,500
Tax Savings in New Regime		1,98,900

So, the tax on 2 lakh salary per month in India under the old regime is nearly ₹4,91,400. And the tax on 2 lakh salary per month under the new regime is ₹2,92,500, saving ₹1,98,900.

When is the Bonus Taxed?   

Bonuses received from the employer are treated as income under the head salary, and you have to pay tax on such bonuses for the same financial year when your employer declares them. Even if you receive the bonus the following year, it will be liable to tax when declared. 

Let’s say your base salary is ₹12 lakh per year, and you get a ₹2 lakh joining bonus.

Your total taxable income = ₹14 lakh. Now, you pay tax as per the slab rates. There’s no separate rate for a bonus. It’s clubbed with salary. So yes, tax on 2 lakh joining bonus is the same as tax on salary.

The same logic applies to tax on 1 lakh joining bonus. So, tax for a 1 lakh joining bonus is slab-based. 

Other Taxable Income Scenarios

1. Dream11 Winnings 

Game winnings like Dream11 are taxed at a flat 30%, with no exemption and no deduction. They fall under “income from other sources”. 

So dream11 tax on 1 lakh is ₹30,000 + 4% cess = ₹31,200.

2. Short-term capital gains below ₹1L 

If you sell shares within 12 months, it’s called short-term capital gain (STCG). STCG on listed equity and equity-oriented mutual funds is taxed at 20%.

But, if the total STCG is below ₹1 lakh, and the total income is under the exemption limit (₹2.5 lakh under the old tax regime and ₹4 lakh under the new regime), then you may not have to pay tax.

Still, short-term capital gains tax below 1 lakh applies if total income exceeds exemption limit. In that case, the total STCG tax will be (1 lakh *20%) = ₹20,000 + applicable cess. 

Now, many people have questions about refunds and GST.

You’ll get an income tax refund if you pay more tax than required. The refund is usually credited within 4–5 weeks after the taxpayer e-verifies it. But if your income tax refund above ₹1 lakh is delayed, check your ITR status for any mismatch or notice from the tax department.

3. GST

The government levies GST only if the total turnover exceeds ₹20 lakhs (₹10 lakhs in some special category States). There’s no 1 lakh GST tax in India unless you cross the threshold.

Conclusion 

Understanding tax rules for ₹1-2 lakh monthly salary helps you plan better. For most people earning this amount, the new tax regime offers simplicity and often lower taxes unless you have significant deductions. Remember, bonuses and additional earnings need careful tax planning, too.

With proper planning, you can reduce your tax burden significantly while staying compliant with tax laws.

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