Adjusted Gross Total Income
This query is : Resolved
18 June 2011
Please explain me what is Gross Total Income. Also give me an example.
Regards
Devendra K
Regards
Devendra K
18 June 2011
Adjusted Gross Total Income means GTI after certain adjustments.
For example :Section 80G deduction in case of Donation to Charitable Trust :
Condition : Qualifying amount is 10% of adjusted GTI.
1. Let GTI is 500000.
2. An Individual donates Rs 60000 to a trust
having registration certi for 80G.
3. He pays LIC Rs 60000/ and in GTI LTCG is Rs 40000
4. For calculating the Qfg amt for 80G
GTI has to be adjusted
5. Adj. GTI = 500000-60000-40000=400000
6.Qfg amt 10% of Adj. GTI =40000
7.Had we not adjusted the GTI Qfg Amt would have been Rs 50000 which would not be correct.
For example :Section 80G deduction in case of Donation to Charitable Trust :
Condition : Qualifying amount is 10% of adjusted GTI.
1. Let GTI is 500000.
2. An Individual donates Rs 60000 to a trust
having registration certi for 80G.
3. He pays LIC Rs 60000/ and in GTI LTCG is Rs 40000
4. For calculating the Qfg amt for 80G
GTI has to be adjusted
5. Adj. GTI = 500000-60000-40000=400000
6.Qfg amt 10% of Adj. GTI =40000
7.Had we not adjusted the GTI Qfg Amt would have been Rs 50000 which would not be correct.
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19 June 2011
Please Explain it in detail
19 June 2011
1. Gross Total Income-
----------------------
As you know for finding out Gross Total Income , We have to first calculate head wise income and then "Total" of 5 heads is made. In case you have b/fd losses which can be set off against the current year's income, deduct set off figure from the "Total" This will be the Gross Ttoal Income.
2 Adjusted Gross Total Income (AGTI).
------------------------------
1. Deductions under Chapter VIA, Like 80C 80D ... to 80U, are allowable from GTI. You know that Calculation of Income Tax is not a simple task. It is calculated on Total Income.
2.Deductions are inserted in the Act for providing tax benefits to the assessees.
Many times, it happens that in a Marriage Party while inviting on the telephone the host invites the full family on Dinner, but later when you receive the invitation Card, Full Family word is struck off on it and invitees are limited to 2 persons only.
Likewise, Govt. has reduced the tax benefit on donations.
3.In spite of allowing donations upto 100%, these are categorised in the way 100%, 50%, 50% with "Cap" and without "cap" like wise. "Cap" means restriction.
In spite of allowing full 50% deduction for Donations to charitable trusts, Govt has put a cap on these donations to 10% of Gross Total Income. But again it is felt that the assessee was being benefited more.
4. Now, the attack is being made on the GTI. For reducing the quantum of deduction it was necessary to reduce the qualifying amount which is fixed at 10% of " Gross total income" (As reduced by the deductions availed by the assessee under chapter VIA) which is briefly told as Adjusted GTI.
----------------------
As you know for finding out Gross Total Income , We have to first calculate head wise income and then "Total" of 5 heads is made. In case you have b/fd losses which can be set off against the current year's income, deduct set off figure from the "Total" This will be the Gross Ttoal Income.
2 Adjusted Gross Total Income (AGTI).
------------------------------
1. Deductions under Chapter VIA, Like 80C 80D ... to 80U, are allowable from GTI. You know that Calculation of Income Tax is not a simple task. It is calculated on Total Income.
2.Deductions are inserted in the Act for providing tax benefits to the assessees.
Many times, it happens that in a Marriage Party while inviting on the telephone the host invites the full family on Dinner, but later when you receive the invitation Card, Full Family word is struck off on it and invitees are limited to 2 persons only.
Likewise, Govt. has reduced the tax benefit on donations.
3.In spite of allowing donations upto 100%, these are categorised in the way 100%, 50%, 50% with "Cap" and without "cap" like wise. "Cap" means restriction.
In spite of allowing full 50% deduction for Donations to charitable trusts, Govt has put a cap on these donations to 10% of Gross Total Income. But again it is felt that the assessee was being benefited more.
4. Now, the attack is being made on the GTI. For reducing the quantum of deduction it was necessary to reduce the qualifying amount which is fixed at 10% of " Gross total income" (As reduced by the deductions availed by the assessee under chapter VIA) which is briefly told as Adjusted GTI.
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