Gross total Income in New Income tax Act 2025 and Tax Rules 2026
Under the new Income-tax Act, 2025, the relevant section that defines “gross total income” is Section 122(10).
According to this section, “gross total income” means the total income computed as per the provisions of the Act, before making any deductions under Chapter VIII.
Thus Under the Income-tax Act, 2025, “gross total income” means the total income of a person computed according to the provisions of the Act, before making any deductions under Chapter VIII.
Here are the key rules regarding gross total income:
- Basis for Deductions: The various tax deductions specified in Chapter VIII are allowed to be deducted directly from an assessee’s gross total income.
- Cap on Deductions: The total aggregate amount of deductions claimed under Chapter VIII cannot, in any case, exceed the gross total income of the assessee.
- Adjusted Gross Total Income: For certain specific calculations, the “adjusted gross total income” is used, which means the gross total income reduced by any portion on which income-tax is not payable, as well as by any other deductions the assessee is entitled to under Chapter VIII.
- Exclusion of Special Incomes: If the gross total income includes certain special types of income (such as short-term capital gains on certain equity shares, long-term capital gains, dividends from Global Depository Receipts, or specific investment incomes of non-residents and offshore funds), the gross total income must be reduced by the amount of such special income. Deductions under Chapter VIII are then allowed only as if this newly reduced amount were the gross total income of the assessee.