Under how many heads the income of a taxpayer is classified? Section 14 of the Income-tax Act has classified the income of a tax...
Under how many heads the income of a taxpayer is classified?
Section 14 of the Income-tax Act has classified the income of a taxpayer under five different heads of income, viz.:
- Income from house property
- Profits and gains of business or profession
- Capital gains
- Income from other sources
What is gross total income?
Total income of a taxpayer from all the heads of income (as discussed in previous FAQ) is referred to as Gross Total Income.
What is the difference between gross total income and total income?
Section 80C to 80U provides certain deductions which can be claimed from Gross Total Income (GTI). After claiming these deductions from GTI, the income remaining 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. 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|
|Less : Deductions under Chapter VI-A (i.e. under section 80C to 80U)|