Gross Total Income” and “Total Income” are terms commonly used in the context of income tax calculations. They represent different stages in the computation of income for tax purposes.

1. Gross Total Income (GTI):
   • Gross Total Income is the total income earned by an individual or entity before any deductions or exemptions.
   • It includes income from all sources, such as salary, business profits, rental income, capital gains, and any other taxable income.
   • GTI is calculated by summing up all income heads without considering deductions or exemptions.
2. Total Income:
   • Total Income is the income remaining after deducting eligible deductions and exemptions from the Gross Total Income.
   • It represents the income on which the taxpayer is actually liable to pay tax.
   • Deductions may include items such as exemptions under various sections of the tax code, deductions for expenses, and other eligible tax benefits.

In mathematical terms:

$\text{Total Income}=\text{Gross Total Income}-\text{Deductions and Exemptions}$

Total Income=Gross Total Income−Deductions and Exemptions

Here’s a simplified breakdown:

• Gross Total Income (GTI):
  • 
    
    $\text{GTI}=\text{Salary Income}+\text{Business Profits}+\text{Capital Gains}+\text{Rental Income}+\text{Other Incomes}$

     

    GTI=Salary Income+Business Profits+Capital Gains+Rental Income+Other Incomes

• Total Income:
  • 
    
    $\text{Total Income}=\text{GTI}-\text{Deductions and Exemptions}$

     

    Total Income=GTI−Deductions and Exemptions

Understanding the distinction between Gross Total Income and Total Income is crucial when filing income tax returns. It helps taxpayers determine their taxable income and the amount of tax they owe to the government. Deductions and exemptions can significantly impact the final tax liability, so it’s important to be aware of the available options under the tax laws of the relevant jurisdiction.