Annual Income is the total amount of money a person earns in one financial year from all sources, including salary, business income, investments, and other earnings.
Annual income represents your total yearly earnings before or after taxes, depending on the context in which it is used. It includes income from multiple sources such as salary or wages, business or professional income, rental income, interest from savings or fixed deposits, dividends, and other investment returns.
Annual income plays a crucial role in financial planning, tax calculation, loan eligibility, and credit assessment. Banks and lenders evaluate annual income to decide how much loan a person can afford and whether they qualify for products like home loans, personal loans, or credit cards.
For salaried individuals, annual income is usually mentioned in the salary slip or offer letter. For self-employed individuals, it is calculated based on yearly business profits. A higher annual income generally improves financial stability and access to better financial opportunities.
"If a person earns ₹50,000 per month as salary and ₹1,00,000 annually from investments, their total annual income will be ₹7,00,000."