Section 14 of the Act provides that for the purpose of charge of Income tax and computation of total income, all incomes shall be classified under following five heads of income
(i) Income under the head “Salaries”.
(ii) Income under the head “House Property”.
(iii) Income under the head “Profits and gains of Business or Profession”.
(iv) Income under the head “Capital Gains”.
(v) Income under the head “Other Sources”.
After aggregating income under various heads (Duly applying clubbing provisions), losses are adjusted and the resultant figure is called “Gross Total Income” (GTI). ‘Gross Total Income’ may also be understood as the total income of an assessee before making any deduction under chapter VIA i.e., undersection 80C to 80U of the Act. Thus,
G. T. I. = Salary Income + House Property Income + Business or Profession Income + Capital Gains + Other Sources Income + Clubbing of Income - Set-off of Losses
Total Income [Section 2(45)]
‘Total income’ means the total amount of income referred to in section 5, computed in the manner laid down in this Act. In other words, ‘Total Income’ means income remaining after allowing deductions under Chapter VIA (i.e., U/s 80C to 80U) from Gross Total Income. It is important to note that income tax is charged on total income at prescribed rate(s).
Rounding off of Total Income [Section 288A]
Rounding off of Tax [Section 288B]
Total income or total taxable income of the assessee shall be rounded-off to the nearest multiple of 10, i.e., if the last figure in the total income is five or more, it would be raised to the next higher multiple of 10 and if the last figure of total income is less than five, the same shall be reduced to lower amount which should be a multiple of ten.
As per the Taxation Laws (Amendment) Act, 2005, (w.e.f. July 13, 2006) the amount of tax payable including tax deductible at source; advance tax, interest, fine, penalty, the amount of any refund etc. shall be rounded to the nearest rupee ten, i.e., last figure of rupee five or above shall be raised to rupee ten whereas if the last figure is upto rupee four and nintynine paisa, it shall be ignored.