Q.What is Gross Total Income? How does it differ from Total Income?

The two figures look similar but one crucial step — subtracting deductions — separates them, and it's Total Income, not Gross Total Income, that tax rates actually apply to. …

Gross Total Income (GTI) is arrived at by computing income separately under each of the five heads of income, and then aggregating them, after allowing for the permitted set-off and carry-forward of losses between/within heads.

Total Income is arrived at by subtracting the permissible deductions (e.g. under Chapter VI-A sections covering specified savings/investments, medical insurance premium, and donations to specified funds) from the Gross Total Income.

Total Income = Gross Total Income − Chapter VI-A Deductions …

Applying the tax slab rates directly to Gross Total Income instead of first subtracting the eligible deductions to arrive …