# Computation of Total Income — Aggregation Format

The final step in tax computation is to aggregate income from all heads, arrive at Gross Total Income, claim Chapter VI-A deductions, and compute Total Income.

## Standard Format

Step	Particulars	Amount (₹)
1	Income from Salary (after Std. Deduction u/s 16)	xxx
2	Income from House Property (after Sec 24 deductions)	xxx
3	Profits & Gains from Business or Profession (after all PGBP adjustments)	xxx
4	Capital Gains (Short-term + Long-term, separately classified)	xxx
5	Income from Other Sources (IFOS — dividends, interest, casual income)	xxx
	Gross Total Income (GTI)	xxx
6	Less: Chapter VI-A Deductions (80C, 80D, 80G, 80GGB/GGC, 80TTA/TTB)	(xxx)
	Total Income	xxx
7	Compute Tax Payable on Total Income	xxx

## Key Points in Aggregation

### Step-wise computation order

1. Compute each head separately with its own rules.

2. Apply intra-head set-off (e.g., business loss vs business profit) and inter-head set-off (e.g., HP loss vs salary — max ₹2,00,000).

3. Aggregate to get GTI.

4. Apply Chapter VI-A deductions (cannot exceed GTI; cannot reduce LTCG @ 12.5%, STCG @ 20% u/s 111A, casual income u/s 115BB).

5. Round off Total Income to nearest ₹10 (Sec 288A).

6. Compute tax as per applicable regime — Old vs New 115BAC.

### Important restrictions on Chapter VI-A under 115BAC (new regime)

Most Chapter VI-A deductions are NOT available under the new regime, except:

80CCD(2) — Employer's NPS contribution (up to 14% Basic+DA)
80CCH(2) — Agniveer corpus fund contribution
80JJAA — additional employee cost
Standard deduction u/s 16(ia) — ₹75,000

### Tax computation reminders

Special rate incomes (LTCG, STCG 111A, lottery 115BB) taxed at special rates — slab rates do NOT apply.
Rebate u/s 87A — Available if Total Income ≤ ₹5L (old) / threshold under new regime as amended.
Surcharge & Health & Education Cess (4%) added to tax.
Marginal relief may apply at surcharge threshold and at 87A threshold.

Worked example

### Example 1

Example — Full Computation Flow

Mr. R has: Salary ₹8,00,000 (gross); HP loss ₹1,50,000; PGBP profit ₹4,00,000; LTCG on listed shares ₹1,20,000; Bank FD interest ₹40,000; LIC premium ₹50,000; Mediclaim ₹25,000. Old regime.

Particulars	₹
Salary (8,00,000 − 50,000 std deduction)	7,50,000
Income from House Property	(1,50,000)
PGBP	4,00,000
LTCG (special rate)	1,20,000
IFOS (interest)	40,000
Gross Total Income	11,60,000
Less: 80C (LIC premium)	(50,000)
Less: 80D (Mediclaim)	(25,000)
Total Income	10,85,000

Tax computed separately on LTCG @ 12.5% (after ₹1.25L exemption) and on balance Total Income at slab rates.

### Example 2

Example — Inter-head Set-off Limit

Loss from House Property ₹3,00,000; Salary ₹10,00,000. Old regime.

Inter-head HP loss set-off vs salary: Max ₹2,00,000 (Sec 71(3A)).
Balance ₹1,00,000 HP loss → carry forward for up to 8 AYs (can be set off only against future HP income).

⚠️ Common exam mistakes

Applying slab rates to Capital Gains or casual income — special rates apply.
Allowing Chapter VI-A deductions under 115BAC beyond the limited list (80CCD(2), 80CCH(2), 80JJAA).
Claiming HP inter-head set-off beyond ₹2,00,000 — the cap u/s 71(3A) limits annual set-off; balance carries forward.
Forgetting to round off Total Income to nearest ₹10 u/s 288A before computing tax.
Computing 87A rebate against tax on special rate incomes — rebate is allowed only on tax computed at normal rates (with limited exceptions under new regime).

Bare-Act text Sections 14, 66, 71, 80A, 288A · Income-tax Act, 1961 · click to expand

Section 14: Save as otherwise provided by this Act, all income shall, for the purposes of charge of income-tax and computation of total income, be classified under the following heads of income: A.—Salaries; B.—Income from house property; C.—Profits and gains of business or profession; D.—Capital gains; E.—Income from other sources. Section 71(3A): Notwithstanding anything contained in sub-section (1) or sub-section (2), where in respect of any assessment year, the net result of the computation under the head 'Income from house property' is a loss and the assessee has income assessable under any other head of income, the assessee shall not be entitled to set off such loss, to the extent the amount of the loss exceeds two lakh rupees.

Now that you've read this — what's next?

Move from understanding → mastery in 3 clicks. Each option below picks up from this lesson's topic.

🔥 Drill 5 Qs on this → ✍️ Adaptive practice →

Computation of Total Income - Aggregation Format

Worked example

⚠️ Common exam mistakes