Taxable income is to be calculated as per the provisions and rules contained in the Income Tax Act, 1961.
For calculating income tax, slab rates are applied to the taxable income earned during the previous year. These slabs are notified in the budget at the end of each financial year. The income is calculated under various heads of Income and added. Next, deductions and/or exemptions available under Chapter VI-A, are deducted to get the Net Income Chargeable to Tax.