Indian Tax Glossary

A section of the Income Tax Act allowing deductions up to ₹1,50,000 per year for investments in LIC premium, PPF, ELSS mutual funds, NSC, home loan principal repayment, and children's tuition fees. Only available under the old tax regime.

Income tax deduction for health insurance premiums paid for self, spouse, children, and parents. Limit is ₹25,000 for self/family and ₹25,000 for parents (₹50,000 each if senior citizen). Only available under the old tax regime.

Tax paid in instalments during the year on income as it is earned, rather than all at once at year end. Mandatory if total tax liability exceeds ₹10,000. Paid in four instalments: 15% by June 15, 45% by September 15, 75% by December 15, and 100% by March 15.

A mandatory yearly meeting that every company must hold within 6 months of the financial year end (i.e., by September 30). Directors present the financial statements to shareholders and pass key resolutions.

A comprehensive tax statement on the Income Tax portal that shows all your financial transactions reported by third parties — bank interest, dividends, mutual fund transactions, property purchases, and more. Used to verify ITR data.

A form filed with the Registrar of Companies (ROC) to submit a company's annual financial statements. Must be filed within 30 days of the Annual General Meeting.

The year in which your income from the previous financial year is assessed and taxed. For income earned in FY 2024-25 (April 2024 to March 2025), the AY is 2025-26. ITR is always filed for the AY, not the FY.

An Income Tax Return filed after the original due date (usually July 31) but before December 31. A late filing fee of ₹5,000 (₹1,000 if income ≤ ₹5L) is charged under Section 234F.

The portion of GST that goes to the Central Government. Every intra-state (within the same state) sale has both CGST and SGST charged at equal rates. For example, 18% GST = 9% CGST + 9% SGST.

A senior Income Tax officer who handles appeals against orders passed by Assessing Officers. The first level of appeal in the income tax hierarchy.

The total annual expense a company incurs for an employee — includes basic salary, HRA, allowances, provident fund contributions, and other benefits. CTC is not your take-home salary.

A unique 8-digit number assigned to every director of a company in India. Required before a person can be appointed as a director. Applied for through the MCA portal.

An electronic signature used to sign documents digitally. Required for filing ROC forms, income tax returns for companies, and GST registrations. Issued by certifying authorities and valid for 1-2 years.

A treaty between India and another country to prevent the same income from being taxed twice — once in India and once in the foreign country. Relevant for NRIs and businesses with international transactions.

A GST compliance requirement where businesses with turnover above a specified limit must generate invoices on the government portal (IRP) and obtain an Invoice Reference Number (IRN) and QR code before issuing to customers.

A type of mutual fund that qualifies for tax deduction under Section 80C. Has a mandatory 3-year lock-in period (shortest among 80C investments). Returns are market-linked.

A social security scheme providing medical and cash benefits to employees earning up to ₹21,000 per month. Both employer (3.25% of wages) and employee (0.75% of wages) contribute. Mandatory for businesses with 10+ employees.

The law governing all foreign exchange transactions in India — investments by NRIs, remittances abroad, foreign loans, and import/export payments. Violations can result in significant penalties.

Documents required for foreign remittances. Form 15CA is a declaration by the remitter; Form 15CB is a certificate from a Chartered Accountant confirming that applicable taxes have been deducted. Required before remitting money abroad in most cases.

A TDS certificate issued by your employer showing the total salary paid to you and the TDS deducted during the financial year. Issued by June 15 after the FY ends. Essential for filing your ITR.

A consolidated tax credit statement on the Income Tax portal showing all TDS deducted by your employer/bank/others, advance tax paid, and self-assessment tax paid. Used to verify ITR data. Now largely replaced by AIS.

The 12-month period from April 1 to March 31 in India. Income is earned and expenses incurred during the FY. Tax is assessed in the following Assessment Year (AY).

India's unified indirect tax on the supply of goods and services, introduced in July 2017. It replaced multiple state and central taxes. GST has four main rates: 5%, 12%, 18%, and 28%, plus a 0% rate for essentials.

A 15-digit unique identification number assigned to every GST-registered business. Format: 2-digit state code + 10-digit PAN + 1-digit entity number + 1 'Z' + 1 check digit.

Monthly or quarterly GST return reporting all outward supplies (sales) made during the period. Details of invoices, credit notes, and debit notes are declared here.

An auto-generated monthly statement showing Input Tax Credit (ITC) available to a business based on invoices uploaded by its suppliers. Used to reconcile ITC claims in GSTR-3B.

Monthly or quarterly summary GST return declaring outward supplies, ITC claimed, and tax paid. This is the primary return used for GST payment.

Annual GST return filed by regular taxpayers reconciling the monthly/quarterly returns filed during the year. Due by December 31 after the financial year ends.

An allowance paid by employers to employees to cover rental accommodation expenses. The exempt portion (not taxable) is calculated using a three-part formula under Section 10(13A). Only available under the old tax regime.

An international system for classifying goods used in GST. Every product has a specific 4/6/8-digit HSN code that determines its applicable GST rate. Services use SAC (Service Accounting Code) instead.

A separate tax entity recognized under Indian law consisting of all members of a Hindu family descended from a common ancestor. A HUF has its own PAN and can file a separate ITR, potentially reducing the family's overall tax.

A 10-digit code required for any business engaged in import or export of goods or services. Issued by the Directorate General of Foreign Trade (DGFT). Mandatory for customs clearance and foreign remittances.

GST charged on inter-state (between two different states) supply of goods and services. The full GST rate applies as IGST, which is then split between the Centre and the destination state.

A new GST feature (introduced October 2024) allowing recipients to accept, reject, or keep pending supplier invoices before they flow into GSTR-2B. Helps ensure accurate ITC claims.

The GST paid on business purchases (inputs) that can be offset against GST collected on sales (output tax). For example, if you pay ₹18 GST on raw materials and collect ₹30 GST on finished goods, you pay only ₹12 to the government.

A form filed with the Income Tax Department declaring your total income, deductions claimed, and tax paid during the financial year. Different ITR forms (ITR-1 to ITR-7) apply to different categories of taxpayers.

A business structure combining features of a partnership and a company. Partners have limited liability (personal assets are protected), and it has a separate legal existence. Popular among professionals and small businesses.

A document filed by exporters on the GST portal to export goods or services without paying IGST, with an undertaking to comply with export provisions. Valid for one financial year and must be renewed annually.

The central government ministry responsible for regulating the corporate sector in India. All company registrations, ROC filings, and corporate compliance is handled through the MCA portal (mca.gov.in).

Annual Return form filed by companies with the Registrar of Companies (ROC) within 60 days of the Annual General Meeting. Contains details of shareholders, directors, and share capital.

A business classification based on investment in plant/machinery and annual turnover. MSME registration (Udyam Registration) provides access to government schemes, priority lending, and tax benefits.

An Indian citizen who has stayed outside India for 182 days or more in a financial year, or 60 days or more in a year AND 365 days or more in the preceding 4 years. NRIs have different tax rules for Indian income.

A company that can be formed by a single person as its sole member and director. Provides limited liability protection to a solo entrepreneur. Can have only one director and one member at any time.

A 10-character alphanumeric identifier (e.g. ABCDE1234F) issued by the Income Tax Department to every taxpayer. Mandatory for filing ITR, opening bank accounts, transactions above ₹50,000, and many other financial activities.

A retirement savings scheme where both the employee (12% of basic + DA) and employer (12%) contribute monthly. Managed by EPFO. The accumulated corpus is tax-free on withdrawal after 5 years of continuous service.

A government-backed long-term savings scheme with a 15-year lock-in. Contributions up to ₹1,50,000 qualify for 80C deduction. Interest earned and maturity amount are fully tax-free.

A state-level tax levied on salaried employees and professionals. The maximum is ₹2,500 per year. Employers must deduct and remit PT monthly. Rules and rates vary by state.

A GST scheme for taxpayers with annual turnover up to ₹5 Crore. They file GSTR-1 and GSTR-3B quarterly (instead of monthly) but pay GST monthly through a simple challan.

A GST provision where the recipient (buyer) of goods/services pays the tax instead of the supplier. Applies to specific categories like legal services from advocates, goods transport (GTA), and imports.

A government office under the Ministry of Corporate Affairs (MCA) responsible for registering companies and LLPs, maintaining statutory records, and enforcing compliance under the Companies Act.

A 6-digit code used to classify services under GST, similar to HSN codes for goods. The SAC code determines the applicable GST rate for a service.

A tax rebate under the Income Tax Act. For FY 2025-26 under the new regime, if your taxable income is up to ₹12,00,000, the full tax is rebated (effectively zero tax). Under the old regime, rebate of up to ₹12,500 for income up to ₹5,00,000.

The portion of GST collected on intra-state (within same state) transactions that goes to the State Government. Equal to CGST in rate. For example, 18% GST = 9% CGST + 9% SGST.

A 10-character alphanumeric number required by any entity responsible for deducting or collecting tax at source (TDS/TCS). Different from PAN. Must be quoted on all TDS challans, certificates (Form 16), and returns.

Tax collected by the seller from the buyer at the time of sale of certain goods or services (scrap, minerals, car above ₹10L, foreign remittance etc.). The seller deposits this with the government.

Tax deducted by the payer before making certain payments — salary, contractor fees, rent, interest, professional fees etc. The deducted amount is deposited with the government on behalf of the recipient.

A certificate issued by the deductor to the deductee showing how much TDS was deducted and deposited. Form 16 is for salary TDS; Form 16A is for non-salary TDS; Form 16B is for property purchase TDS.

The official MSME registration process on udyamregistration.gov.in based on self-declared turnover and investment. Replaced the earlier Udyog Aadhaar. Required to access MSME benefits and schemes.

The official term under Indian tax law for cryptocurrencies, NFTs, and similar digital assets. Income from VDA transfer is taxed at a flat 30% with no deductions (except cost of acquisition). 1% TDS under Section 194S applies.