Taxable income refers to the amount on which the government calculates tax. This amount includes all income and excludes all deductions.
For example, your income from your salary, your other income like interest, rental income, etc. are all added up. From that, subtract Rs 2.5 lakh – in India, the first Rs 2.5 lakh is deducted. Then, other deductions like standard deduction, investments made under section 80C, HRA deductions, and so on are all removed from your total income. What is left is the taxable income. The tax applicable to you is calculated based on this taxable income.