Sunday, Sep 25, 2022
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How To Calculate Gross Total Income For Tax Filing Purpose

You have received your Form 16 from your employer. But is that the only income you have? What about any income you have earned on your bank deposits or from your home? Do take care to include them as well to correctly calculate your gross total income for tax purposes.

How To Calculate Gross Total Income For Tax Filing Purpose Income Tax

You have received your Form 16 and also collected all the relevant documents for your tax filing process.

Now, if you have seen the income tax return form, depending on the form you need to fill – ITR 1/Sahaj, ITR-2, ITR -3 or ITR -4, you would have seen that the section ‘income source details has three major sections – ‘Income from Salary’, ‘Income from the House Property’ and ‘Income from Other Sources’.

You will have to fill in the details one by one. Here’s how to go about it step-by-step.

Income From Salary

Mention the salary as per Section 17(1). Keep your Form 16 handy to fill in the details. Alternatively, you can also go to the Annual Information Statements (AIS) section and check the amount mentioned under the salary column, and fill in the details.

For ‘Perquisites’, check Form 16 and fill in the details. Leave the column blank if you have not received any perquisite. 

You will also need to enter information in relation to ‘Less: Exempt Allowances’. For this too, check Form 16 for details related to house rent allowance (HRA), leave travel allowance (LTA), and children’s education allowance. 

If you are not certain about a particular allowance, then put it under the ‘Any Other’ column and mention the detail as mentioned in Form 16. 

The next part is about total deduction. You need to mention the ‘Standard deduction under Section 16 (ia)’ column. 

For ‘Professional Tax under Section 16 (iii)’, refer to Form 16.

Do note that there is a new option: Income from retirement benefit maintained in a notified country that you need to mention under Section 89A. 

Income From House Property

Fill the details as required in the relevant column, i.e., whether the house is rented out or you are the sole owner. If the house is rented out, then under the ‘Type of House Property’ column, choose the option ‘Let Out’, or else, select ‘Self Occupied’. 

Under the ‘Interest payable on borrowed capital’ option, fill in the information related to any home loan that you might have taken. You are eligible to claim a benefit of up to Rs. 2 lakh a year on the interest on your home loan. Refer to the interest certificate provided by the bank to check the interest component on your home loan.

If you have received any rental income from your house, mention it in the relevant column in the “income from house property” section.

Income From Other Sources

You might have received a refund from the income tax department from last year. That amount comes with an interest. You need to mention that in the column, ‘Income from Other Sources’.

Any interest income that you would have received from your bank deposit or deposits from post office/cooperative society will also have to be mentioned here. Crosscheck the amount from the Annual Information Statement (AIS) portal.

Do note that four new columns have also been added. If your contribution to your Employees’ Provident Fund (EPF) exceeds Rs 2.5 lakh, any interest received over and above is now taxable and will need to be mentioned here. 

You will also need to fill in the family pension income details, if applicable.

Under the last column, i.e., ‘Quarterly break-up of dividend income’, verify the amount from the AIS portal. 

Having executed all the steps on this page, you will arrive at your ‘Gross Total Income’. 

This is how you can arrive at your gross total income for your tax calculation purpose.