The amount arrived after adding income under five heads of Income, is termed as ______

The correct answer is Gross Total Income.

Key Points

• The Gross Total Income is the aggregate amount arrived at by adding income under all five heads of income.
• The five heads of income as per the Income Tax Act, 1961 are:
  • Salaries
  • Income from house property
  • Profits and gains of business or profession
  • Capital gains
  • Income from other sources
• After computing the income under each head, they are summed up to arrive at the Gross Total Income.
• The Gross Total Income is computed before applying any deductions under Chapter VI-A of the Income Tax Act.

 Additional Information

• Net Income
  • Net Income is the income that remains after all expenses, taxes, and deductions have been subtracted from the total revenue or gross income.
  • In the context of individual income taxation, it is often referred to as taxable income.
• Actual Income
  • Actual Income is not a specific term used in the context of income tax.
  • It generally refers to the real income earned by an individual or entity but lacks a formal definition in tax laws.
• Net Total Income
  • Net Total Income is often used synonymously with taxable income.
  • It is the income on which tax is actually levied after deductions and exemptions.