We know that five heads of Income combine to form Gross Total Income

Out of these,Certain Items called Deductions are reduced to arrive at Net total Income.

Tax is imposed on this Net total income as shown below


Particulars Amt
Income from Salaries xx
Income from House Property xx
Profits and Gains of Business and Profession xx
Income from Capital Gains xx
Income from Other Sources xx
Gross Total Income xx
Deductions under Chapter VIA xx
Net Total Income  
Tax on Net total Income xx

hence Deductions lead to decrease in Income and hence decrease in tax

Hence these are beneficial to the assessee

Lets study these in detail here  

  1. Tax Practical
  2. Practical Income Tax

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 9 years. He also provides Accounts Tax GST Training in Delhi and Pune.