Income Tax Glossary

The year immediately following the Financial Year in which income is assessed for tax — e.g., FY 2024-25 income is assessed in AY 2025-26.

Annual Information Statement — comprehensive digital statement of 45+ transaction categories.

Tax paid in four instalments during the FY when income is earned, per Section 208.

Alternate Minimum Tax under Section 115JC — 18.5% for LLPs and other non-corporates.

Investor in early-stage startups — 56(2)(viib) angel tax applies to premium.

Atal Pension Yojana — pension scheme, 80CCD(1) eligible.

Income threshold below which no tax — ₹2.5L (old), ₹3L (new AY 24-25 — up to age 60).

Group of assets with same rate of depreciation.

Adjusted profit computed for MAT / AMT calculation.

Adjusted profit for partner remuneration limits calculation.

Free shares issued from reserves — cost is nil, holding period from parent.

Fixed component of salary — used in PF/HRA/gratuity calculation.

Health & Education cess at 4% on tax + surcharge.

Cost Inflation Index — notified annually by CBDT; used for indexation.

Chapter containing all deductions (80C to 80U).

Chapter for Tax Deducted at Source (TDS).

Chapter for special tax rates (LTCG, STCG, MAT, AMT).

Member of HUF with birthright — includes daughters post 2005 amendment.

Capital expenditure post-acquisition — added to cost while computing gain.

GST composition scheme — 1%/5%/6% flat tax on turnover.

Double Taxation Avoidance Agreement — treaty between India and other countries.

PIO/OCI with Indian income > ₹15L and not liable in other country — Section 6(1A).

Wear-and-tear deduction under Section 32; rates per Appendix I.

Section 2(22)(e) — advance / loan to shareholder treated as dividend.

Department for Promotion of Industry and Internal Trade — startup recognition.

Dearness Allowance — inflation-linked salary component.

Employee Stock Option Plan — taxed as perquisite at exercise, capital gain at sale.

Employee Stock Purchase Plan — discount taxed as perquisite; sale as capital gain.

Employees' Pension Scheme — 8.33% of employer PF.

Equity Linked Savings Scheme — 3-year lock-in equity MF, 80C eligible.

The 12-month period from 1 April to 31 March in which income is earned.

Certificate of TDS on salary issued by employer under Rule 31; Part A from TRACES, Part B computed by employer.

Certificate of TDS on non-salary income (rent, professional, interest) issued quarterly.

Consolidated annual tax credit statement showing all TDS/TCS/advance tax/SAT credited to PAN.

Declaration by non-senior for no TDS if income below basic exemption.

Same as 15G but for senior citizens (60+).

Challan-cum-statement for 1% TDS on property purchase > ₹50L.

Challan-cum-statement for 5% TDS on rent > ₹50k/month (Section 194IB).

Tax audit report format for non-corporate taxpayers.

Tax audit report format for corporate taxpayers.

Report on international / specified domestic transactions (transfer pricing).

Option exercise form for 22% corporate rate under 115BAA.

Option exercise form for 15% new manufacturing rate under 115BAB.

Relief computation under Section 89 for arrears / advance salary.

Certificate of donation for 80G issued by donee to donor.

Statement of donations filed by donee with CBDT.

Statement of foreign tax paid — filed before ITR to claim FTC.

Foreign Tax Credit — relief from double taxation.

Partnership under Indian Partnership Act 1932 — files ITR-5.

FMV as on 31 January 2018 substituted as cost for pre-2018 listed equity.

Retirement benefit under Payment of Gratuity Act — 15 days salary × years.

House Rent Allowance — exemption under Section 10(13A).

Hindu Undivided Family — separate assessee under Income Tax Act.

Sahaj — for resident individuals with income up to ₹50L from salary, one house, interest.

For individuals/HUFs with capital gains, foreign income, more than one house.

For individuals/HUFs with business or profession income including F&O.

Sugam — presumptive scheme 44AD/44ADA/44AE up to threshold.

For partnership firms, LLPs, AOPs, BOIs.

For companies (except Section 8) — filed electronically with DSC.

For trusts, NGOs, political parties, Section 8 companies.

Updated return under Section 139(8A) — 24-month window with 25%/50% additional tax.

Adjustment of cost of acquisition using Cost Inflation Index (CII) for LTCG on long-term assets.

Head of HUF — files return on behalf of family.

Kisan Vikas Patra — post office savings scheme.

Leave Travel Allowance — exemption under Section 10(5).

Long-Term Capital Gains — asset held beyond prescribed period.

Limited Liability Partnership under LLP Act 2008 — files ITR-5.

Liberalised Remittance Scheme — RBI framework for individual foreign remittance.

Minimum Alternate Tax under Section 115JB — 15% of book profit for companies.

Section 115BAC — lower slab rates without most exemptions; default from AY 2024-25.

Non-Resident Indian — < 182 days in India (with exceptions).

National Savings Certificate — 5-year, interest reinvested qualifies under 80C.

National Pension System — 80CCD(1)/(1B)/(2) eligible.

Traditional tax regime with all Chapter VI-A deductions and exemptions.

Section 3 definition — same as Financial Year for tax purposes; the year in which income is earned.

Permanent Account Number — 10-character alphanumeric ID issued by CBDT under Section 139A.

Non-cash benefit from employer — valued under Rule 3.

Splitting of HUF property — taxable event under Section 47.

Capital contribution by partner — interest up to 12% deductible under 40(b).

Deemed profit computation without maintaining books.

Provident Fund — 12% employee + 12% employer contribution.

Public Provident Fund — 15-year EEE scheme, 80C eligible.

Resident and Ordinarily Resident — taxed on worldwide income.

Resident but Not Ordinarily Resident — taxed only on India source and specified foreign income.

Restricted Stock Units — taxed as salary at vest and capital gain at sale.

Balance tax paid via Challan 280 before ITR filing under Section 140A.

Interest on late filing — 1% per month on unpaid tax from due date till filing.

Interest on unpaid advance tax — 1% per month from 1 April of AY.

Interest on advance tax instalment shortfall — 1% × 3 months per instalment.

Late-filing fee — ₹5,000 (₹1,000 if income < ₹5L).

Presumptive scheme — 6% (digital) / 8% deemed profit for business up to ₹3 Cr turnover.

Presumptive scheme for professionals — 50% deemed profit up to ₹75L receipts.

Presumptive for goods carriage owners — ₹7,500/tonne/month per vehicle (≤10 vehicles).

Tax audit by CA when business turnover > ₹1 Cr (₹10 Cr digital) or profession > ₹75L.

Books of accounts requirement thresholds for business/profession.

Deduction up to ₹1.5L for PPF, EPF, ELSS, LIC, home-loan principal etc. — old regime only.

Health insurance premium deduction — ₹25k/₹50k self, ₹25k/₹50k parents.

Additional NPS deduction of ₹50k over and above 80C — old regime only.

Employer NPS contribution deduction up to 10% (14% central govt) — both regimes.

Deduction for donations to charitable institutions — 50%/100% with/without cap.

₹10k deduction on savings interest for non-seniors — old regime.

₹50k deduction on FD + savings interest for senior citizens — old regime.

Deduction for education loan interest — 8 years, no cap on amount.

First-time home buyer additional ₹50k interest deduction (loans sanctioned FY 16-17).

Affordable housing additional ₹1.5L interest deduction (loans sanctioned FY 19-22).

Home-loan interest deduction — ₹2L (self-occupied), unlimited (let-out).

House Rent Allowance exemption — min of three formulas.

LTA exemption — twice in a block of four years within India.

Rebate of ₹12,500 (old) / ₹25,000 (new AY 24-25) if total income ≤ ₹7L (new).

Additional tax on tax — 10% at >₹50L, 15% at >₹1Cr, 25% at >₹2Cr, 37% at >₹5Cr (old); capped 25% in new regime.

22% flat corporate tax without exemptions — one-time irrevocable option.

15% flat for new manufacturing companies incorporated after 1 Oct 2019.

3-year tax holiday for DPIIT-recognised startups within first 10 years.

Deduction of 30% × new employee salary for 3 years.

Short-Term Capital Gains — asset held below prescribed period.

STCG on listed equity taxed at 15%.

LTCG on listed equity > ₹1L taxed at 10% (no indexation).

LTCG on other assets — 20% with indexation.

LTCG exemption on residential property reinvested in another residential property.

LTCG on any long-term asset exempt if reinvested in residential property.

LTCG on land/building reinvested in NHAI/REC bonds — up to ₹50L/FY.

10% TDS on dividend above ₹5,000/FY.

10% TDS on interest other than securities (bank interest, unsecured loans).

1%/2% TDS on contractor payments.

5% TDS on commission and brokerage.

10% TDS on rent (building/land) above ₹2.4L/year.

5% TDS on rent by individual/HUF above ₹50k/month.

10% TDS on professional/technical fees above ₹30k/year.

0.1% TDS on purchase of goods above ₹50L/year.

1% TDS by e-commerce operator on gross sale to seller.

10% TDS on benefits or perquisites arising from business/profession above ₹20k.

1% TDS on VDA (crypto) transactions.

TDS on payments to non-residents at DTAA or applicable Act rate.

Nil / lower TDS certificate application via TRACES.

Foreign Assets schedule in ITR-2/3 — mandatory for RORs.

Assets & Liabilities schedule required if total income > ₹50L.

Scope of total income based on residential status.

Residential status determination based on days in India.

Relief on salary arrears / advance / gratuity — Form 10E.

Gratuity exemption — up to ₹20L for private employees.

Leave encashment exemption — ₹25L for non-govt employees.

Flat deduction from salary — ₹50k (old) / ₹75k (new AY 25-26).

Section for standard deduction from salary income.

Interest on delays in filing / advance tax / instalments.

Under-reporting penalty — 50% (misreporting 200%).

Penalty for failing to maintain books of accounts under 44AA.

Penalty for skipping tax audit — 0.5% of turnover, max ₹1.5L.

Late filing penalty (replaced by 234F for individuals).

Penalty for late TDS return filing — ₹10k to ₹1L.

Prosecution for wilful failure to file ITR — 3 months to 2 years.

Search and seizure authority.

Survey provisions for the department.

Intimation after processing — usually within 9 months of filing.

Intimation for arithmetic error / AIS mismatch / disallowed claim.

Notice for scrutiny assessment — issued within 3 months of AY end.

Scrutiny assessment order.

Best judgement assessment when taxpayer fails to comply.

Notice for reassessment / income escaping assessment.

Notice of demand under intimation / assessment.

Rectification of mistake apparent from record.

Refund adjustment against outstanding demand.

Interest on delayed refund — 0.5% per month.

Original ITR filing due date provision.

Belated return provision.

Revised return provision.

Updated return (ITR-U) provision.

Defective return notice provision.

PAN-Aadhaar linking mandate.

Partner remuneration / interest deduction limits for firms.

Cash payment above ₹10k/day disallowance.

Certain expenses deductible only on actual payment.

MSME payment within 45 days rule — else disallowance.

Speculative business — F&O treated as non-speculative business.

Additional 20% depreciation for new plant & machinery.

R&D expenditure — 100% deduction (150% earlier).

Weighted deduction for in-house R&D (approved by DSIR).

Investment-linked deduction for specified businesses.

Employer's contribution to superannuation fund.

General business expenditure deduction — wholly and exclusively for business.

Cessation of trading liability — taxable in year of cessation.

Charging section for capital gains.

Transactions not regarded as transfer — gifts, HUF partition, amalgamation.

Cost of acquisition in specific cases — gift, inheritance, partition.

Depreciable assets — always short-term capital gain.

Debt MF from 1 Apr 2023 — always taxable at slab.

Cost of acquisition — FMV as on 1 April 2001 for pre-2001 assets.

Gifts above ₹50k from non-relatives taxable as OS.

Angel tax — share premium above FMV in unlisted company.

Deductions from Income from Other Sources.

Transfer of income without transfer of asset — clubbed.

Clubbing of income — spouse, minor child.

Set-off of loss within same head.

Set-off of loss across heads (except capital gains).

Carry-forward of business loss — 8 years.

Speculative loss — 4 years, only against speculative.

Specified business loss — indefinite carry-forward.

Capital loss carry-forward — 8 years.

Race horse loss carry-forward — 4 years.

Change of shareholding — loss carry-forward restriction (closely-held companies).

Deductions available only if ITR filed within due date.

Marginal relief on rebate under 87A.

DTAA relief — bilateral agreement.

Unilateral relief — credit method for non-treaty countries.

Transfer pricing — arm's-length principle.

Thin capitalisation — interest deduction cap for multinationals.

Lottery / gaming winnings — 30% flat, no deduction.

VDA (crypto) income — 30% flat, no deduction.

Continued NRI benefits for the year of return.

Alternate Minimum Tax for LLPs and other non-corporates.

Minimum Alternate Tax for companies.

Tonnage tax scheme for shipping companies.

Return of income tax — accumulated profits distribution.

Cost of bonus shares — nil.

Cost of split shares — proportionate.

Long-term capital asset definition.

Short-term capital asset definition.

Transfer — includes sale, exchange, relinquishment, extinguishment.

Distribution of assets on firm dissolution — deemed transfer.

Joint development agreement — capital gain in year of completion certificate.

Entity meeting DPIIT criteria — eligible for 80-IAC tax holiday.

Deduction up to ₹1.5L for electric vehicle loan interest.

Structured data telling voice assistants which paragraphs to read.

Exemption from filing ITR for super-seniors (75+) with pension + interest from same bank.

2% TDS on cash withdrawal above ₹1 Cr (₹20L for non-filers).

5% TDS on personal payments to professionals/contractors above ₹50L.

10% TDS on mutual fund income above ₹5,000.

Higher TDS at 20% for missing PAN / inoperative PAN.

Higher TDS for non-filers of ITR.

0.1% TCS on sale of goods above ₹50L (superseded by 194Q for buyer).

5% TCS on foreign remittance under LRS above ₹7L.

Presumptive scheme for foreign shipping / air companies.

Tax rates applied progressively based on income brackets.

Senior Citizens Savings Scheme — 80C eligible, interest taxable.

Girl-child savings scheme — 80C, EEE status.

Tax Deduction Account Number — 10-character ID required for deductors under Section 203A.

Taxpayer Information Summary — head-wise aggregate derived from AIS.

Tax Deducted at Source — tax withheld by payer under Chapter XVII-B and deposited with government.

Tax Collected at Source under Section 206C — collected by seller on specified goods (scrap, forest produce, etc.).

Tax Residency Certificate — required for DTAA relief.

Virtual Digital Asset — crypto / NFT under Section 2(47A).

Voluntary Provident Fund — additional employee PF contribution.

Written Down Value — depreciated value of block of assets.