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Gross Total Income and Total Income under Income Tax Act

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Gross Total Income is calculated by adding the income of all of the five heads and to arrive at the total income you must subtract from it the deduction under chapter VIA of the Income Tax Act 1961. Here in this post, you will get the difference between gross total income and total income.

Difference Between Gross Total Income and Total Income

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To understand the difference, it is necessary to understand both the terms separately as under-

Gross Total Income

In simple words, Gross Total Income (GTI) is the sum of Incomes computed under the five head of Income i.e. salary, house property, business or profession, capital gains, and other sources after applying to clubbing of Income and making adjustments of set-off and carry forward of losses.

The GTI can be calculated by using below mentioned formula-

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GTI- Salary Income + House Property Income + Business or Profession Income + Capital Gain Income + Other Sources Income + Clubbing of Income – Set off of Losses.

🎯 Different types of ITR form- which ITR form should you file?

Total Income

The total Income is derived after subtracting the various deductions u/s 80 from the GTI. So, you first calculate the GTI and then subtract the deductions to arrive at the total income.

The total income can be calculated by using below mentioned formula-

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TI- Gross Total Income – Allowable Deductions

Your tax liability will be estimated on the Total Income. In simple terms, you pay tax on your total income.

Comparision Chart

Basis Gross Total Income Total Income
Meaning Gross Total Income is the aggregate income of a person, arrived after adding up income from all the five sources. Total Income refers to that income of the assessee on which the tax liability is calculated.
Formula GTI: Salary Income + House Property Income + Business or Profession Income + Capital Gain Income + Other Sources Income + Clubbing of Income – Set off of Losses. TI: Gross Total Income – Allowable Deductions
Deductions Income before making deductions under chapter VI-A Income after making deductions under chapter VI-A
Tax Tax is not calculated and levied on this Income Tax is calculated and levied on this income
Difference Between Gross Total Income and Total Income

Some FAQs

  1. How do I calculate my Gross Total Income?

    Gross Total Income can be calculated with Salary Income + House Property Income + Business or Profession Income + Capital Gain Income + Other Sources Income + Clubbing of Income – Set off of Losses.

  2. What is the difference between Gross Total Income and Total Income?

    Gross Total Income refers to the total income computed under the five head of Income but Total Income is the result of GTI – Deduction u/s 80C to 80U of the Income Tax , 1961.

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  3. What is total Income under Income Tax?

    The total Income is derived after subtracting the various deductions u/s 80 from the GTI. So, you first calculate the GTI and then subtract the deductions to arrive at the total income.

  4. How do you calculate total Income?

    Total Income refers to the income of the assessee on which the tax liability is calculated. For calculating total income, first, calculate the GTI and then subtract the deductions under chapter VI-A

Disclaimer: The information contained in the above article are solely for informational purpose after exercising due care. However, it does not constitute professional advice or a formal recommendation. The author does not own any responsibility for any loss or damage caused to any person, directly or indirectly, for any action taken on the basis of the above article.

Feedback/Suggestion- Hope you all find it useful, please give your valuable feedback & let us know if there is an error. Thanks in Advance

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Compiled by- CA Chirag Agarwal (Practicing Chartered Accountants)

This post was last updated on February 8, 2021 4:19 PM

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