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Gross Total Income

What is Gross Total Income?

The aggregate of all your income from all the five heads - salary, house property, capital gains, business, and other sources, before allowing the deductions under chapter VI-A(section 80C-80U) is known as Gross Total Income.

How to Calculate Gross Total Income with Formula

Formula for Gross Income (Individual):

Gross Income (Individual)=Sum of income from all sources earned by the individual

To calculate for an individual, follow these steps:

Step 1: Identify all sources of income, such as salary, dividends, rent, etc.

Step 2: Sum up these income sources obtained in the first step:

Gross Income = Salary + House Property + Capital Gains + Business/Profession + All Other Sources of Income - Set off of losses.

Formula for Gross Income (Business):

Gross Income (Business)=Total Revenue–Cost of Goods Sold

To calculate for a business, follow these steps:

Step 1: Determine the total revenue of the business.

Step 2: Identify the cost of goods sold for the business.

Step 3: Calculate using the formula:

Gross Income=Total Revenue–Cost of Goods Sold

Examples of Gross Total Income

Example 1

Mr. Albert is an employee in a manufacturing concern. His annual salary is Rs.1,20,000, and he has no other income. Find out his gross income per month.

Solution:

Annual Salary: Rs.1,20,000

Annual Salary: Rs.1,20,000

Per Month:

Gross Income (Individual)=Rs.1,20,000 / 12

Gross Income (Individual)= Rs.10,000

 

Difference Between Gross Total Income and Total Income

Basis 

Gross Total Income 

Total Income 

Meaning 

Calculated by adding income from all 5 sources and setting off losses

Used to calculate the tax payable.

Equals to 

Entire income before claiming Chapter VI-A deductions 

Deductions under Section 80 (80C to 80U)

Tax Treatment

Tax not levied

Income tax payable on this sum

Deductions under Chapter VI-A

Income before deductions is the gross total income

After deductions, it becomes the total income

Income Tax Obligation

Gross Total Income doesn't determine tax obligations

Total income determines and assesses income tax obligation