Q.How to calculate total income?
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Start your 14-day free trial to unlock the full solution →Total income = Gross Total Income minus deductions under Chapter VI-A. First income under the five heads is added to get Gross Total Income, then eligible deductions (like 80C, 80D) are subtracted.
Under the Income Tax Act, total income (the amount on which tax is charged) is computed in the following steps:
- Compute income under each of the five heads of income — (a) Income from Salaries,
(b) Income from House Property,
(c) Profits and Gains of Business or Profession,
(d) Capital Gains, and (e) Income from Other Sources.
2. Add the income of all five heads (after adjusting set-off of losses) to arrive at the Gross Total Income (GTI).
3. Deduct the deductions allowed under Chapter VI-A (Sections 80C to 80U) — for example, deductions for life-insurance premium, provident-fund contribution, health-insurance premium, etc. …
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