A STUDY OF

Gross Income and Total Income

A
PROJECT REPORT SUBMITTED
TO SAVITRIBAL PHULE PUNE UNIVERSITY,
FOR THE AWARD OF BACHELOR IN BUSINESS
ADMINISTRATION (BBA)
SUBMITTED BY
Mr. Aditya Walunj UNDER THE
GUIDANCE OF
Prof. Prerna Tulve
THROUGH
SNBP COLLEGE OF ARTS COMMERCE
SCIENCE AND
MANAGEMENT STUDIES, MORWADI,
PIMPRI 2019-20
CERTIFICATE
This is to certify that Aditya Walunj of the class TY
BBA, . Has Satisfactorily completed project and
semester 4 . As laid down by the Savitribai Phule
Pune University Pune for the academic year
2021-2022
DECLERATION:

I, the undersigned Mr. Aditya Walunj hereby

declare that the Project report entitled
"Memorandum, with reference to Business
Communication Written and Submitted by Me to
University of Pune in Partial fulfilment of The
Requirement for Award of Degree of Bachelor of
Business Administration Under the Guidance of
Prof. Prerna Mam Is my original Work the
Empirical Findings and Suggestion in The Report
Are Based on The Original Information Collected
By me
Place: Pimpri Chinchwad Date:
Name Aditya Walunj Sign:
Preface
Research in common man's language refers to a
search for knowledge. One can also define
research as a scientific and systematic search for
pertinent information on a specific topic, in fact
research is an art of scientific investigation.
Research is done to gain familiarity with a
phenomenon event/product/service or to
determine the frequency with which something
occurs, with which is associated with something
else or to test a hypothesis of casual relationship
between variables. In short customer perception
research is the objective and formal process
Index
1)Introduction
2) Gross income and total income
3) The various additions required to be made in
Gross Total Income
4) Total Income
5) The Steps to determine the total income
6)What are the five heads of income
 Introduction
Business gross income
Gross income is a line item that is sometimes included in a company’s income statement. If
not displayed, it’s
calculated as gross revenue minus COGS.

Gross Income=Gross Revenue−COGS

where:
COGS=Cost of Goods Sold

Gross income is sometimes referred to as gross margin. There’s also gross profit margin,
which is more correctly defined as a percentage and is used as a profitability metric. The
gross income for a company reveals how much money it has made on its products or
services after subtracting the direct costs to make the product or provide the service.

While the gross income metric factors in the direct cost of producing or providing goods and
services, it does not include other costs related to selling activities, administration, taxes,
and other costs related to running the overall business.
Example of Individual Gross Income
Assume that an individual has a $75,000 annual salary, generates $1,000 a year in interest
from a savings
account, collects $500 per year in stock dividends, and receives $10,000 a year from rental
property income.
Their gross annual income is $86,500.
How do I calculate my gross income?
An individual’s gross income is the total amount earned before taxes or other deductions.
Usually, an
employee’s paycheck will state the gross pay as well as the take-home pay. If applicable,
you’ll also need to add
other sources of income that you have generated—gross, not net.

Gross income and total income

In India, any person who has an income that is exceeding the minimum limit given as
under the specific income tax slab has to pay the income tax. The income tax has to be
calculated based on the total income or taxable total income (TTI).
The ‘gross total income’ (GTI) is the total income you earn by
adding all heads of income. Income from salary, property, other sources, business or
profession, and capital gains earned in a financial year are all added to arrive at the GTI.
Aggregate of incomes computed under the above 5 heads, after
applying clubbing provisions and making adjustments of set off and carry forward of losses,
is known as Gross Total Income (GTI). [Section 80B(5)]

The various additions required to be made in Gross Total Income

Apart from adding earnings from all five heads of income following
shall also be added to calculate your gross total income.
Income to be added as per the clubbing provisions under the Income Tax Act
Adjustments for set off and carry forward of losses
 Unexplained Tax Credit under section 68 of the Income Tax Act 1961, received whether in
cash or credit.
Unexplained Investments as per the purview of section 69 of the Income.
Although we have obtained an understanding on the above income and assets or
expenditures which are added to the gross total income. But, these additions or nature of
additions are not generally witnessed in routine

Assets and other money under Section 69A, valuables like money, jewellery etc for which
no proper explanation is available with the assessee
Undisclosed or lower disclosed income is added to the Gross Total Income as per the
provisions of Section 69B of the Income Tax Act 1961. This relates to all those income and
assets which you have not reported or made a lower disclosure then the actual funds.
Unexplained expenditures under section 69C.
Hundi amount borrowed or repaid. In case you have borrowed or repaid some amount on
Hundi then it shall be added to your Gross Total income or GI as per the provisions of section
69D of the income tax act.

• Section 5 determines the scope of total income for a resident or a non-resident

assessee. It follows that for a resident assessee, the total income include all income that
accrue, arise, earned or received in India (except those income which accrues or arises
outside India)
•However various chapters and sections of the Income tax Act further lays down which
income would not form part of total income, computation to be made, Clubbing of Income,
set off or carry forward of loss and deductions to be made in computing total income.

Total income or taxable total income-

As per section 14, all income shall, for purposes of Income-tax and computation of total
income, be classified under the following heads of income:
1. Salary
2. Income from house property
3. Profits and gains of business and profession
4.Capital gains and
5.Income from other sources

•The computation of total income of an Assessee is made by deducting from the gross total
income.
•Means total income = grass total income [ (A)+ (B) + (C) +
(D) + (E) and head wise deduction ] – deduction available under chapter VIA (sec. 80C to 80U)

The steps in which the Total Income, for any assessment year, is
determined are as follows:
A. Determine the residential status of the Assessee to find out which
income is to be included in the computation of his Total Income.
B. Classify the income under each of the following five heads. Compute the income under
each head after allowing the deductions prescribed for each head of income.
C. subtracting all deductions permissible under Chapter VIA of the Income-tax Act i.e.,
deductions under sections 80C to 80U

What are the five heads of income?

As per section 14 of the Income Tax Act, income is classified into the following categories
known as Heads of Income.

Income from Salary

Income from House Property
Income from Profits and Gains of Profession or Business
Income from Capital Gains
Income from Other Sources

What are the five heads of income?

As per section 14 of the Income Tax Act, income is classified into the following categories
known as Heads of Income.

Income from Salary

Income from House Property
Income from Profits and Gains of Profession or Business
Income from Capital Gains
Income from Other Sources

What are the various additions required to be made in Gross Total Income?
Apart from adding earnings from all five heads of income following shall also be added to
calculate your gross total income

Income to be added as per the clubbing provisions under the Income Tax Act
Adjustments for set off and carry forward of losses
Unexplained Tax Credit under section 68 of the Income Tax Act 1961, received whether in
cash or credit. Which means receipt of any amount of which you do not have sufficient or
valid explanation describing the source of receipt of such income. These categories of
income are added to your Gross Total Income.
Unexplained Investments i.e. the investments which you have made but you are unable to
give satisfactory explanation about the source or improper disclosures have been made on
your part. In all these situations your investments will be termed as unexplained
investments as per the purview of section 69 of the Income Tax Act. also, it shall be added to
your Gross Total Income (GTI)
Assets and other money under Section 69A, valuables like money, jewellery etc for which no
proper explanation is available with the assessee will be added to the Gross Total Income of
the person.
Undisclosed or lower disclosed income is added to the Gross Total Income as per the
provisions of Section 69B of the Income Tax Act 1961. This relates to all those income and
assets which you have not reported or made a lower disclosure then the actual funds.
Unexplained expenditures under section 69C. In case you have made some expenses and no
proper explanation regarding the same available then it would be added to your Gross Total
Income and henceforth charged to taxes accordingly.
Hundi amount borrowed or repaid. In case you have borrowed or repaid some amount on
Hundi then it shall be added to your Gross Total income or GI as per the provisions of section
69D of the income tax act.
Although we have obtained an understanding on the above income and assets or
expenditures which are added to the gross total income. But, these additions or nature of
additions are not generally witnessed in routine.

Difference between Gross Total Income & Total Income

To understand their difference in simple terms, look at the following formulae:

TI = GTI – deductions under Section 80

Or

GTI = TI + deductions under Section 80

So, GTI is the total of all the heads of income while TI is GTI minus the deductions.

To calculate GTI, you add the following:

Income from salary: This includes the earning from employment.

Income from house property: This includes any rent you earn by letting out a house.
Income from business or profession: This includes the income earned by a businessman or a
self-employed professional.
Capital gains/loss: This includes profits or losses you incur by selling any movable or
immovable capital property. That would include land, building, house, shares, jewellery, etc.
Income from other sources: The income not included in the above-mentioned heads
features in this. Examples would be income from interest, a lottery gain, etc.
To calculate TI, the following deductions under Section 80 of Chapter VI of the Income Tax
Act are subtracted from the GTI

80C: Allows specific investments and expenses to be deducted from the GTI up to Rs 1.5 lakh.
80CCD: NPS (National Pension System) contribution up to Rs 50,000 is allowed as deduction.
80D: Health insurance premiums, up to Rs 60,000, paid for self and for parents qualify under
this section.
80TTA: Interest earned from the savings account, up to Rs 10,000, is tax-free.
80E: Interest paid on education loan is deducted.
80GG: This includes housing rent allowance (HRA) exemption for those who do not have an
HRA component in their salary.
80DDB: Expenses incurred on specific illnesses are deducted up to Rs 40,000 or Rs 60,000,
depending on the patient’s age.
80U: This gives a fixed deduction if you have a physical disability. The deduction is Rs 75,000
or Rs 1.25 lakh, depending on the severity of the disability.
80G: Charitable donations made to recognised institutes are allowed as deduction.
To sum up, the difference between the GTI and TI must be clear to you now. Do not confuse
between the two the next time you file your returns.

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