What Is The Full Form Of GTI In Income Tax?
GTI full form in income tax is Gross Total Income. It’s the total amount of money earned before taking out any deductions, covering all the sources as defined by the Income Tax Act of 1961. GTI is important as it’s the starting point for figuring out what amount of income is actually taxable after allowed deductions and adjustments. That income is earmarked from five broad areas: salary, income from house property, earnings from business or profession, profits from selling assets (capital gains), and other miscellaneous sources. But, note that at the moment, there should not be a subtraction of the amounts saved through tax-saving investments in your calculation of the GTI.
Calculation and Components:
To calculate GTI, you add up all the money you earn from different sources like your salary, rent received from properties, profits from any business activities, gains made from selling assets, and other miscellaneous incomes. This amount is also adjusted for specific tax rules concerning the grouping of incomes and the setting-off of past or future losses. Sometimes, GTI also includes incomes or investments not recorded in any official documents as per certain rules laid in sections 68 to 69D of the Income Tax Act.
Importance and Utility:
GTI is the initial figure used to work out your taxable income by subtracting allowed deductions under a specific chapter of the Income Tax Act. This is an important consideration to file returns and comply with the prevailing tax rules. This is used by tax authorities in order to understand the entire spectrum of either personal or business income before applying for tax benefits.