Net Taxable Income

Net Taxable Income refers to the portion of your earnings that is actually subject to income tax after all allowable deductions have been applied. To arrive at this figure, you first total your income from all heads—such as salary, property, business activities, capital gains, and other miscellaneous sources. This gives you the Gross Total Income. From this amount, you then subtract deductions available under sections like 80C, 80D, 80G, or those related to NPS. The balance that remains becomes your Net Taxable Income, and your final tax liability is computed on that number.

Example:

Assume your total income for the year is ₹10,20,000 and you are eligible for deductions worth ₹1,75,000. After reducing these deductions, your Net Taxable Income would be ₹8,45,000, and this amount would be taxed according to the relevant tax slabs.