Taxable income is the amount of income actually subject to tax after all deductions, the figure your tax rate is applied to, which differs from both gross income and accounting profit.
Taxable income is not what you earned or even your accounting profit, it is what remains after subtracting allowed deductions. For a corporation, the T2 starts from accounting net income and adjusts for tax rules: adding back non-deductible items like the 50% of meals, replacing book depreciation with capital cost allowance, and applying loss carryforwards.
For an individual, taxable income is total income less deductions such as RRSP contributions, before non-refundable credits are applied. Understanding the gap between accounting profit and taxable income is central to tax planning, because it is the taxable figure, not the book figure, that drives your bill.
A corporation reports $100,000 accounting profit. After adding back $3,000 of non-deductible meals and swapping $12,000 book depreciation for $15,000 CCA, its taxable income is $90,000, the amount actually taxed.
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