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What is Gross Total Income. Meaning / Difference between Gross Total Income and Total Income under Income Tax Act, 1961 Very often, the terms "Gross Total Income" [GTI] and "Total Income" [TI] are grossly mis-understood by number of people. The proper understanding of the two terms is of paramount importance for proper computation of income tax and preparation of income tax return. Let's snoop into the realms of the two terms
"total income" means the total amount of income referred to in section 5, computed in the manner laid down in this act. Section 5 determines the scope of total income for a resident or a non-resident assessee. It follows that for a resident assessee, the total income include all income that accrue, arise, earned or received in India (except those income which accrues or arises outside India)
However various chapters and sections of the Income tax Act further lays down which income would not form part of total income, computation to be made, Clubbing of Income, set off or carry forward of loss and deductions to be made in computing total income.
As per section 80A of the Chapter VI-A, "in computing the total income of the assessee, here shall be allowed from his
gross total income........ deductions specified in section 80C to 80U."
Now, a close look at the chapter-wise funnel makes both the term abundantly clear.
Section 17 - Salary, perquisite and profits in lieu of salary defined. Section 80A - Deductions to be made in computing total income The aggregate of various deductions under chapter VIA shall not exceed the gross total income of the assessee
Section 80AB - Deduction to be made with reference to income included in the gross total income
Section-80CCD Deduction in respect of contribution to pension scheme of Central Govt.
Section-80CCG Deduction in respect of investment made under an equity saving scheme
Section-80G - Deductions for Donations
Section-80GGA - Deduction in respect of certain donations for scientific research or rural development
Section 111A Tax on short-term capital gains in certain cases
Section 112 - Tax on long-term capital gains
Section-87A - Rebate of income tax. (Read more on section 87A Rebate)
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Surcharge on income tax
Section 139(1) Filing of Income Tax Return
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