Income
In Budget 2025, the Finance Minister announced that no tax will have to be paid on the annual income of Rs 12 lakh. At the same time, with this, the tax slab has been changed for various income groups, in which between Rs 4-7 lakh income will now have to pay 5% tax, income between Rs 8-12 lakh will have to pay 10% tax. , And those with income between Rs 12-16 lakh will have to pay 15% tax. At the same time, it has been announced to impose tax at the rate of 20% on annual income of 16 to 20 lakhs, 25% on annual income of 20 to 24 lakhs and 30% on income of more than 24 lakhs. After these changes, the discussion of taxable income VS Gross Income VS NET Income has intensified once again. Let us know how to calculate tax liability on your salary.
Gross Income: Your gross income includes all income from various sources before any deduction or exemption is implemented. Another way to interpret gross income is to connect all your income from different sources before any adjustment. This is the total income that you earn before any tax.
Gross Salary: Gross salary is the total amount earned by an employee before any deduction or taxes are reduced. This includes basic salary, home rent allowance (HRA), additional allowances and any bonus.
Net Income: Net income is the remaining income left after reducing all expenses, taxes and deductions from a person’s total income.
Taxable income: Taxable income income is a gross income of a person after any tax exemption for that year. To calculate your taxable income, you must first determine your gross income from all sources and then reduce any deduction or discount for which you are eligible. The Income Tax Act offers various deductions and discounts that may vary depending on your investment, expenditure and other specific tax regulations.
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