Total Income is the income on which tax liability is determined. It is necessary to compute total income to ascertain tax liability. Section 80C to 80U provides certain deductions that can be claimed from Gross Total Income (GTI). After claiming these deductions from GTI, the remaining income is called as Total Income.
In other words, GTI less Deductions (under section 80C to 80U) = Total Income (TI). Total income can also be understood as taxable income. The following table gives a better understanding of the difference between GTI and TI :
Computation of gross total income and Taxable Income
|Income from salary||XXXXX|
|Income from house property||XXXXX|
|Profits and gains of business or profession||XXXXX|
|Income from other sources||XXXXX|
|Gross Total Income||XXXXX|
|Less : Deductions under Chapter VI-A (i.e. under section 80C to 80U)||(XXXXX)|
|Total Income (i.e., taxable income)||XXXXX|
Note : Inter source losses, inter head losses, brought forward losses, unabsorbed depreciation, etc., (if any) will have to be adjusted (as per the Income-tax Law) while computing the gross total income.