Financial & Tax Glossary

Quarterly pre-payment of expected income tax during the financial year when total tax liability exceeds ₹10,000.

Comprehensive statement on the income tax e-filing portal showing all income, TDS, and financial transactions reported by banks, employers, and financial institutions for the financial year.

Industry body regulating and maintaining standards for the mutual fund industry in India. All mutual fund distributors must hold AMFI Registration Number (ARN).

The calendar year immediately following the Financial Year in which the Income Tax Department assesses and processes your income tax return.

Total market value of client assets managed by an investment firm, mutual fund, or advisor.

When total business expenses exceed total business revenue for a financial year, resulting in a net loss.

Profit earned from the sale of capital assets like shares, property, mutual funds, or gold.

Government-notified index used to adjust the purchase cost of an asset for inflation when calculating Long-Term Capital Gains (LTCG) on non-equity assets.

Annual reduction in value of a business asset, allowed as a deduction under Section 32 of the Income Tax Act.

Portion of company profit distributed to shareholders as cash or additional shares.

Mutual fund scheme offering tax deduction under Section 80C with a mandatory 3-year lock-in period. Available only under the Old Tax Regime.

Mandatory retirement savings scheme for salaried employees, with 12% of basic salary deducted monthly from employee + 12% contributed by employer.

Income that is fully exempt from income tax under specific provisions of the Income Tax Act.

F&O income is classified as Non-Speculative Business Income and taxed at the individual's applicable slab rates (5%, 20%, or 30%), NOT as capital gains at flat rates.

In India, financial year runs from April 1 to March 31. Income earned during this period is reported in the ITR filed in the following Assessment Year.

Certificate issued by employer showing salary paid and TDS deducted during the financial year. Contains Part A (TDS details) and Part B (salary breakup with deductions).

Tax credit statement showing all TDS deducted on income across all sources during the financial year, available on the income tax e-filing portal.

Lump sum payment made by employer to employee on retirement or resignation after completing minimum 5 years of continuous service.

Unified indirect tax on goods and services in India, replacing multiple state and central taxes. Businesses/professionals with turnover > ₹20L (₹10L in special category states) must register.

Health insurance premiums and specified medical expenses are deductible under Section 80D in India (unlike the US HSA structure).

Component of salary paid by employer towards rent, exempt from tax under Section 10(13A) subject to conditions. Only available under the Old Tax Regime.

Adjustment to cost of acquisition based on Cost Inflation Index (CII) for calculating long-term capital gains on non-equity assets.

Income Tax Return form for individuals with income from salary, one house property, and other sources (excluding business/profession).

ITR form for individuals with income from salary, capital gains, more than one house property, or foreign income — but NOT business/professional income.

ITR form for individuals and HUFs carrying on a business or profession. Mandatory when any business/professional income exists.

Simplified ITR form for individuals and HUFs opting for presumptive income schemes (Section 44AD for business, 44ADA for professionals). Not applicable for F&O traders or large businesses.

Profit from sale of capital assets held for more than 12 months (equities/equity MFs) or 24 months (property/unlisted shares).

Ability to carry forward business losses or capital losses to future financial years to set off against future profits or gains.

Tax provision allowing unused business or capital losses to be applied against future profits, reducing tax liability in profitable years.

Investment fund pooling money from multiple investors to purchase a diversified portfolio of securities (stocks, bonds, etc.), managed by professional fund managers.

Price per unit of a mutual fund calculated daily as (total assets − liabilities) ÷ number of units outstanding.

Default tax regime (from AY 2024-25) with simplified lower tax slabs and no itemized deductions (except standard deduction of ₹75K for salaried individuals and a few others).

Retirement savings scheme with tax benefits and investment flexibility. Contributions eligible under Section 80C and additional deduction under 80CCD(1B). Available only under the Old Tax Regime.

The traditional tax structure with multiple deductions and exemptions (80C, 80D, 80G, HRA, LTA, etc.) and tax slabs of 0%, 5%, 20%, 30%. Available as an opt-in choice for FY 2025-26.

Government-backed savings scheme with 15-year maturity, tax-free interest (currently 7.1% p.a.), and withdrawal options after 7 years. Section 80C eligible.

Mandatory savings scheme for salaried employees (EPF) or voluntary for self-employed/investors (PPF).

SEBI license granted to individuals/entities to provide investment advice and portfolio management services on a fee-only basis.

Employee receiving regular salary, bonus, and benefits from an employer. Files ITR-1 (salary only) or ITR-3 (if additional business/professional income).

General deduction provision allowing business/professional expenses incurred wholly and exclusively for business purposes to be deducted from business income.

Scheme allowing eligible business owners to declare deemed income of 8% of gross turnover (6% if receipts are via digital/banking modes), without proving actual expenses.

Scheme allowing specified professionals (doctors, lawyers, CAs, engineers, architects, consultants) to opt for 50% of gross receipts as deemed taxable income, without proving actual expenses.

Income tax deduction up to ₹1.5 lakh for investments in specified instruments like ELSS, LIC, PPF, NSC, and EPF. Available only under the Old Tax Regime.

Additional deduction of up to ₹50,000 for contributions to National Pension System (NPS) beyond the 80C limit. Available only under the Old Tax Regime.

Deduction for health insurance premiums paid for self, spouse, children, and parents. Available only under the Old Tax Regime.

Unlimited deduction for interest paid on education loan taken for higher education of self, spouse, or children. Available only under the Old Tax Regime.

Deduction for donations made to approved charitable institutions and relief funds. Available only under the Old Tax Regime.

Deduction up to ₹10,000 for interest earned on savings bank accounts (not FD or RD interest). Available only under the Old Tax Regime.

Deduction up to ₹50,000 for interest income from savings accounts, fixed deposits, and recurring deposits, available exclusively to senior citizens (aged 60+). Available only under the Old Tax Regime.

Tax rebate for resident individuals reducing total tax liability to zero when taxable income is within specified thresholds: Old Regime ≤ ₹5L; New Regime ≤ ₹12L (FY 2025-26).

Individual earning income from own business, profession, or freelance work (not as employee). Must file ITR-3 (actual expenses) or ITR-4 (presumptive scheme) — NOT ITR-2.

Profit from sale of capital assets held for 12 months or less (equities/equity MFs) or 24 months or less (property/unlisted shares).

Method of investing a fixed amount regularly in a mutual fund at fixed intervals (monthly, quarterly).

A flat deduction of ₹75,000 from salary/pension income for salaried individuals and pensioners, available under the New Tax Regime (AY 2024-25 onwards). Also ₹50,000 under the Old Tax Regime.

Automatic transfer of funds from one mutual fund scheme to another at regular intervals.

Regular withdrawal of a fixed amount from a mutual fund investment at specified intervals.

Mandatory audit under Section 44AB based on gross turnover/receipts thresholds. Business: audit required if turnover > ₹1Cr (₹3Cr if 95%+ digital). Professionals: if gross receipts > ₹50L (₹75L if 95%+ digital).

Direct reduction in tax liability (not a deduction from income). Section 87A provides a rebate based on taxable income thresholds that differ by tax regime.

Income tax rate structure under the default New Tax Regime (FY 2025-26): ₹0–4L: 0%, ₹4–8L: 5%, ₹8–12L: 10%, ₹12–16L: 15%, ₹16–20L: 20%, ₹20–24L: 25%, above ₹24L: 30%.

Income tax rate structure under the Old Tax Regime (available as opt-in for FY 2025-26): ₹0–2.5L: 0%, ₹2.5–5L: 5%, ₹5–10L: 20%, above ₹10L: 30%.

Progressive income tax rate structure applied to different bands of taxable income. Rates and bands differ between the Old Tax Regime and New Tax Regime.

Tax withheld by a payer at the time of payment and deposited with tax authorities on behalf of the payee.

Total gross revenue from business or professional services before deducting expenses. Used to determine GST registration, tax audit, and presumptive income eligibility.