Tax in itself is a tedious phenomenon and the complexity increases when various terms are also added to the list. We all know that tax is levied upon income. But, income has been further classified and referred to by various names in India such as
In this blogpost we will get you a detailed understanding upon Gross Total Income or GTI. What is the relevance of Gross Total Income? Why you should know about it? How it is calculated? The difference between GTI and TI (Total income) under the Income Tax Act in India and much more
As the name suggests Gross Total Income is the aggregate of all the income earned by you during a specified period. According to Section 14 of the Income Tax Act 1961, the income of a person or an assessee can be categorised under these five heads,
And, Gross Total income is arrived at when your earnings from all these five heads of income is taken together.
The computation of gross total income is vital because
While calculating gross total income one must sum up all of their income without reducing the amount for any tax saving investments made under Section 80C to 80U under Income Tax Act 1961.
Apart from adding earnings from all five heads of income following shall also be added to calculate your gross total income
Although we have obtained an understanding on the above income and assets or expenditures which are added to the gross total income. But, these additions or nature of additions are not generally witnessed in routine.
Gross Total Income is calculated foremost by adding your income under all five heads of income. Now, to arrive at the Total income you must subtract from it the deductions under chapter VI A of the Income Tax Act 1961. I.e the deduction ranging form section 80C to 80U . Which means
|Income From Salary||xx|
|Add: Income Under the Head House Property||xx|
|Add: Profits and Gains of Business and Profession||xx|
|Add: capital gains Income||xx|
|Add: Income from Other Sources||xx|
|Gross Total Income||xxx|
|Less: Deductions under Section 80C to 80U||xx|
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Ans. The total annual income considered for EBC is INR 1 lakh(gross).
Ans: There are five heads of income to compute the gross total income, namely, Income from salaries, Income from house property, profits and gains of business or profession, income from capital gains and income from other sources.
Ans. Gross total income refers to the total of income computed under the five heads of income. Taxable income is obtained after deducting various deductions under chapter VI A from gross total income.
Ans. Surcharge is neither calculated on total income nor on taxable income. It is calculated on income tax computed on the taxable income as per rates applicable to the assessee.
Ans. Annual income is the net taxable income in which tax is computed. It is arrived after deducting various deductions from gross total income.
Complete guide covering all the basic tax related terms. So, that tax terms will not work as a road-stopper in your way!!
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