What Does Gross Total Income Mean?

As per the section 14, income of a person is computed under the following five heads: 1. 2. 3. 4. 5. Salaries Income from house property Profits and gains of business or profession. Capital gains. Income from other sources.

The aggregate income under these heads is termed as gross total income. Gross total income means total income computed in accordance with the provision of the act before making any deductions under sections 80C to 80U. In simple words, an individual's total personal income before taking taxes or deductions into account.

What Does Total Income Mean? Total income of an assessee is gross total income as reduced by the amount permissible as deduction under sections 80C to 80U. In simple words, an individual's total personal income after taking deductions under sections 80C to 80U into account.

How Total Income of Individual is computed? The steps in which the Total Income, for any assessment year, is determined are as follows: 1. Determine the residential status of the assessee to find out which income is to be included in the computation of his Total Income. 2. Classify the income under each of the following five heads. Compute the income under each head after allowing the deductions prescribed for each head of income.

Computation of Total Income

(a) Income from Salaries Salary/Bonus/Commission, etc. --Taxable Allowance --Value of Taxable perquisites --Gross Salary --Less: Deductions under section 16 --Net taxable income from Salary --(b) Income from House Property Net annual value of House Property --Less: Deductions under section 24 --Income from House Property --(c) Profit and Gains of Business and Profession Net profit as per P & L Account --Less/Add: Adjustments required --to be made to the profit as per provisions of Income-tax Act. Net Profit and Gains of Business and Profession --(d) Capital Gains Capital Gains as computed --Amount of Capital Gains Less: exemptions under section 54, 54B, 54D, 54EC, 54F, 54G, 5GA AND 54H.--Income from Capital Gains --(e) Income from Other Sources Gross Income --Less: Deductions --Net Income from Other Sources ----Gross Total Income [(a) + (b) + (c) + (d) + (e)] Less: Deduction available under Chapter VIA (Sections 80C to 80U) ----Total Income

Computation of Tax Liability

(a) Tax on net income --(b) Add: Surcharge --(c) Add: Education cess --(d) Add: Secondary and higher education cess --(e) Less : Rebate under sections 86, 89, 90, 90A and 91 --(f) Net Tax payable [(a) + (b) + (c) + (d) - (e)] --(g) Tax paid on self-assessment --(h) Tax deducted or collected at source --(i) Tax paid in advance --(j) Balance Tax payable [(f) - (g) - (h) - (i)] ---