Meaning of Total income as per section 2(45), defined under Income Tax Act, 1961:
Income tax is payable on the total income at the rate of income tax prescribed. The term GTI has been defined in sub-section 45 of section 2 of Income Tax Act, 1961.
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.
Total income is computed on the basis of the residential status of the Assessee. It is that income, which he gets from different sources, e.g.: – income from salary, house-property, business & profession, income from other sources etc. this makes Gross total income. To arrive at the Total Income, various deductions from S. 80C to 80U are made to Gross total income.
Related Cases:
S. 2(45) 5, 32, 80B(5), 80-IA of IT Act, 1961—Deduction—The deduction under Chapter VI-A is a special deduction and the quantum of deduction there under has to be computed by ascertaining that part of the total income which represents the profits and gains derived by an undertaking after deducting all the deductions allowable under s. 30 to 43D of the Act. Therefore, assuming that in the assessment year in question the assessee has an option to disclaim depreciation, that would not have any bearing on the computation of quantum deduction under s. 80-IA of the Act—Plastiblends India Ltd. vs. Addl. CIT [2009] 227 CTR 1(FB)(Bom)
S. 2(45), 5, 253(6) of IT Act, 1961—Appeal (Tribunal)—The court fees for filing appeal under s. 253(6) before the Tribunal depends on total income of the assessee. Negative income cannot be more and it will always be less and cl. (a) of s. 253(6) would apply. If on other hand, one takes the view that as the assessee is assesseed at a loss, cl. (a) or (b) or (c) cannot apply as they postulate assessment out of a positive figure then, it is only cl. (d) which applies and, even so, the fee payable would be Rs. 500—GIBS Computer Ltd. vs. ITAT (2009) 317 ITR 159 (ITAT-Bom)
S. 2(45), 254C, 245D(2) of the IT Act, 1961—Settlement of cases—If the assessee is entitled to carry forward the loss of the previous year then the total income to be calculated in that manner—Gobind Builders and Developers vs. ITSC (Bom)
Reference:
As Per Section 2(45), of the Income Tax Act, 1961-
“Total income” means the total amount of income referred to in Section 5, computed in the manner laid down in this Act.