Taxable Income

Taxable income is the amount of your income that is actually subject to income tax. It is calculated by taking your gross total income from all five heads — salary, house property, business or profession, capital gains, and other sources — and subtracting all deductions and exemptions permitted under the Income Tax Act 2025. Under the new regime (Section 202), most deductions including Section 80C, 80D, HRA, and Section 80CCD are not available, but a standard deduction of ₹75,000 is built into the slab structure. Your taxable income determines which income tax slab you fall into and therefore the rate at which your income is taxed. It also determines whether you need to pay advance tax, the applicability of surcharge, and your eligibility for rebate under Section 87A. The rebate of up to ₹60,000 under Section 87A is available only when taxable income does not exceed ₹12 lakh.