'Computation of Income' is the process of determining the various sources of income. The various revenues are eventually pooled as "Gross Total Income" while computing income. Following the computation of income, the tax is calculated using the applicable income tax rate and the various income tax deductions available.

Why is Income tax computation required for employees?

Each employee in the Company/ partnership firm/ sole proprietorship firm has different salary structure and falls under different income slabs based on his salary. Further, he makes certain investments which can be claimed as deductions while filing the Income Tax Return by the employee. Income tax computation is required for employees so that the company can deduct the TDS from salary accordingly and deposits with the government.

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