Gross Total Income: What is It, Components & Calculation

Gross Total Income is the sum of all income sources before deductions. Learn its differences with total income and exclusions during calculation for accuracy.
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4 min
22-August-2025

Gross Total Income (GTI) is one of the most important concepts in the Indian taxation system. It represents the total income you earn from all sources before applying deductions. Since GTI forms the basis for computing your taxable income, getting it right is essential for tax planning and compliance.

While GTI tells you how much you’ve earned, how you plan and invest that income decides your financial stability. Along with understanding GTI, you can channel your earnings into safe, high-return instruments like Bajaj Finance Fixed Deposits (FDs) to secure your future.

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Components of gross total income

Gross Total Income is made up of five heads of income:

  1. Income from salaries – Basic pay, allowances, bonuses, and commissions received as part of employment.

  2. Income from house property – Rental income after deducting municipal taxes and eligible deductions.

  3. Profits and gains of business or profession – Net profits from business activities or professional services.

  4. Capital gains – Profit from the sale of assets like property, stocks, or bonds.

  5. Income from other sources – Residual income such as bank interest, fixed deposit interest, dividends, gifts, or winnings.

Each component is calculated separately and then aggregated to form your Gross Total Income.

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Calculation of gross total income

The calculation of GTI involves the following steps:

  1. Compute income under each head using respective rules and exemptions.

  2. Aggregate incomes from all heads to arrive at the cumulative figure.

  3. Include clubbed income, such as income of a minor child or spouse if applicable.

  4. Adjust for set-off of losses, either intra-head or inter-head.

Formula:
GTI = Salaries + House Property + Business/Profession + Capital Gains + Other Sources + Clubbed Income – Set-off of Losses

This ensures an accurate assessment of taxable income before deductions.

Importance of calculating gross total income

Understanding GTI is important for multiple reasons:

  • Tax liability assessment – GTI is the starting point for determining taxable income. After applying deductions under sections like 80C and 80D, your net taxable income is derived.

  • Financial planning – Knowing your GTI helps you plan investments and reduce taxes effectively.

  • Loan eligibility – Banks consider GTI to evaluate your repayment capacity while approving loans.

  • Compliance – Accurate GTI reporting ensures error-free ITR filing and avoids penalties.

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Gross total income and total income: Key difference

Although the terms are often used together, GTI and Total Income are different:

Aspect

Gross Total Income (GTI)

Total Income

Definition

Aggregate income from all sources before deductions.

Income after subtracting eligible deductions from GTI.

Calculation

Sum of salaries, house property, business/profession, capital gains, and other sources.

GTI – Deductions under Chapter VI-A (Sections 80C to 80U).

Relevance

Helps assess overall earnings.

Determines final taxable income and tax liability.

Taxation

GTI is the starting point.

Total income is the actual taxable base.

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Conclusion

Gross Total Income is the foundation of India’s tax system, representing your income from multiple sources before deductions. By accurately computing GTI, you can ensure compliance, optimise your tax outflow, and plan finances effectively.

However, beyond tax planning, the real key lies in growing your disposable income through reliable instruments. Bajaj Finance Fixed Deposit provides a secure option with assured returns, helping you convert today’s earnings into tomorrow’s financial strength.

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Calculate your expected investment returns with the help of our investment calculators.

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Frequently asked questions

What is a gross total income?
Gross Total Income (GTI) is the total income earned from all sources before applying any deductions under the Income Tax Act. It includes income from salaries, house property, business or profession, capital gains, and other sources. GTI serves as the basis for computing taxable income after adjusting for eligible deductions.

Why should I prefer Bajaj Finance FD over keeping money in a savings account?

Savings accounts offer low interest rates, whereas Bajaj Finance FD offers up to 7.30% p.a. on deposits. This ensures faster and more reliable wealth creation while keeping your funds safe. Open FD.

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