There are certain investments that help you bring down tax - these include life insurance plans, health insurance plans, retirement schemes or even NSC. One can claim a tax deduction on the money he/she spends on medical expenses or on charity. Tax deductions under different sections of the Income Tax ActĪs the name suggests, tax deductions help to save tax on your total income.
Income from other sources: Any income that can't be bracketed under the other four heads of income will come under the head income from other sources.Īll above components put together constitute your Gross Income.Income from rent on House property: The next head - Income from House property - includes any rental income that an individual earns as rent from a residential or commercial property, and is subject to taxation.This gain is further categorized as Short Term Capital Gains (STCG) and Long Term Capital Gains (LTCG). Income from capital gains: Any profit or gain that arises from sale or transfer of capital assets (such as stocks, Mutual Funds, Real estate etc) is taxable under the head capital gains.Income from Business or Profession: The income that one earns through business or profession is also taxable.The aggregate of the above-mentioned incomes is called Gross Salary. Allowances on transport, medical expenses etc.Any Annuity & Gratuity benefits received in that financial year.The salary amount can include these components:
Income from Salary: This is the monthly income one receives from the employer they work for.Income is classified into five categories: Sources of Income & Calculation of Gross Income