ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Gross income refers to the total income earned by an individual on a paycheck before taxes and other deductions. It comprises all incomes received by an individual from all sources – including wages, rental income, interest income, and dividends.

Detailed explanation-2: -Take Home or Net Salary = Direct Benefits-Deductions In this case, tax is based on the employee’s gross salary and the employer is required to deduct TDS from an employee’s salary. However, the basic salary of an employee should be at least 50-60% of their gross salary.

Detailed explanation-3: -For the year you are filing, earned income includes all income from employment, but only if it is includable in gross income. Examples of earned income are: wages; salaries; tips; and other taxable employee compensation. Earned income also includes net earnings from self-employment.

Detailed explanation-4: -Gross income includes your wages, dividends, capital gains, business income, retirement distributions as well as other income. Adjustments to Income include such items as Educator expenses, Student loan interest, Alimony payments or contributions to a retirement account.

Detailed explanation-5: -A deduction is an expense that can be subtracted from a taxpayer’s gross income in order to reduce the amount of income that is subject to taxation.