The Complete Indian Tax Glossary & Legal Dictionary

Applies to LLPs, sole proprietorships, and partnerships claiming deductions under Chapter VI-A (Section 80H to 80RRB) or Section 35AD. AMT credit can be carried forward up to 15 assessment years under Section 115JD. Note: AMT does not apply if opting for the New Tax Regime u/s 115BAC.

Financial Year (FY): The year in which you earn income (e.g., April 1, 2024 to March 31, 2025 is FY 2024-25).
Assessment Year (AY): The year in which that income is assessed and return is filed (e.g., April 1, 2025 to March 31, 2026 is AY 2025-26).

A late fee under Section 234F of ₹5,000 applies (reduced to ₹1,000 if total taxable income is below ₹5 Lakhs). In addition, interest at 1% per month under Section 234A is charged on outstanding tax liability, and capital or business losses cannot be carried forward.

If income tax payable under normal provisions of the Income Tax Act is less than 15% of Book Profits, the book profit itself is deemed total taxable income. MAT credits can be carried forward for up to 15 assessment years under Section 115JAA. MAT does not apply to companies opting for Section 115BAA/BAB (22% concessional rate).

Non-speculative business losses can be set off against any head of income (House Property, Capital Gains, Other Sources) except Salary Income under Section 71(2A). Speculative trading losses (equity intraday) can only be set off against speculative profits.

Stock-in-trade (inventory), personal effects (clothing, furniture, personal cars), and specified rural agricultural land are strictly excluded from the definition of a capital asset and do not generate capital gains tax upon transfer.

If you sell a residential property and cannot purchase/construct a replacement home before the ITR filing due date (July 31), you must deposit the unutilized capital gains into a CGAS account (Type A savings or Type B term deposit) before filing your ITR.

Business losses and capital gains losses can be carried forward for up to 8 assessment years. House property losses can be carried forward for 8 years. Unabsorbed depreciation can be carried forward indefinitely. Mandatory Rule: The ITR must be filed on or before the due date u/s 139(1) to retain this benefit!

Cess is not applied to gross income; it is calculated directly on the total tax liability (after surcharge, if any). Section 40(a)(ii) retrospectively clarifies that health & education cess is strictly non-deductible as a business expenditure.

For sales after July 23, 2024, indexation has been replaced with a flat 12.5% LTCG rate. However, for properties acquired before July 23, 2024, resident taxpayers can choose whichever is lower: 12.5% without indexation OR 20% with indexation.

The company must possess accumulated profits (capitalized or not) up to the extent of the loan. The amount is taxed at the shareholder's applicable slab rates under 'Income from Other Sources', with 10% TDS u/s 194.

Computers & Laptops: 40% WDV. Plant & Machinery: 15%. Commercial Vehicles: 30%. Non-residential Buildings: 10%. If an asset is put to use for less than 180 days in the purchase year, only 50% of the normal depreciation rate is allowable.

Relief is provided via the Exemption method or Foreign Tax Credit (FTC) method u/s 90. To claim DTAA concessional tax rates (e.g. 10%-15% on royalty, fees for technical services, or dividends), non-residents must furnish a Tax Residency Certificate (TRC) and Form 10F.

Consists of Part A (GSTIN of supplier & recipient, delivery place, invoice number, HSN code) and Part B (vehicle registration number/transporter ID). Validity is calculated based on transit distance: 1 day for every 200 km (or part thereof).

The 6% levy applies to B2B online advertisement payments exceeding ₹1 Lakh annually to foreign entities (e.g. Google, Meta). Note: Budget 2024 officially abolished the 2% equalisation levy on foreign e-commerce operators effective August 1, 2024.

Income that does not form part of total income at all (e.g. Agricultural income u/s 10(1), HRA u/s 10(13A), Gratuity u/s 10(10)). It is deducted before computing Gross Total Income.

Part A: TRACES-generated summary showing employer/employee PAN/TAN, quarterly tax deducted, and government challan numbers.
Part B: Detailed annexure with gross salary, perquisites, Section 10 exemptions (HRA, LTA), Standard Deduction, and Chapter VI-A deductions.

Part A (TDS on Salary & non-salary), Part B (TCS by car dealers/sellers), Part C (Tax paid via Challan 280), Part D (Tax refunds received from CPC), Part E (High-value SFT transactions), Part F (TDS on immovable property u/s 194-IA).

Form 67 must be submitted online on the e-filing portal on or before the end of the relevant assessment year (i.e. by December 31st) to claim FTC against your Indian tax computation. It must be accompanied by foreign tax payment receipts or withholding certificates.

In income tax nomenclature, Financial Year is synonymous with 'Previous Year' (PY). All financial records, bank statements, invoice dates, and investments made between April 1 and March 31 govern the computation for that financial cycle.

1. Salaries • 2. Income from House Property • 3. Profits and Gains of Business or Profession (PGBP) • 4. Capital Gains • 5. Income from Other Sources (Interest, Dividends, Lottery). GTI = Sum of all 5 heads.

CGST + SGST: Levied equally on intra-state supplies (within same state).
IGST: Levied on inter-state supplies (across state borders) and import of goods/services.
Threshold Limits: ₹20 Lakhs for service providers (₹10L special states), ₹40 Lakhs for goods suppliers.

GSTR-1: Due on the 11th of the following month (13th for quarterly IFF under QRMP). Auto-populates buyer's GSTR-2B.
GSTR-3B: Due on the 20th of the following month (22nd/24th under QRMP). Actual tax payment happens during GSTR-3B filing.

1. Must possess tax invoice • 2. Goods/services must be received • 3. Supplier must have paid the tax to the government • 4. Invoice must be reflected in buyer's GSTR-2B statement • 5. Buyer must pay supplier within 180 days (or reverse ITC with interest).

Minimum of the following three is exempt:
1. Actual HRA received from employer
2. 50% of Basic Salary + DA (for metro cities: Delhi, Mumbai, Kolkata, Chennai) or 40% (non-metro)
3. Actual rent paid minus 10% of Basic Salary + DA.

An HUF enjoys its own separate basic exemption limit (₹3 Lakhs in New Regime or ₹2.5 Lakhs in Old Regime), independent Chapter VI-A deductions (Section 80C up to ₹1.5L, 80D up to ₹25K), and can hold ancestral real estate, stocks, and mutual funds.

ITR-1 (Sahaj): Salaried/pensioners with 1 house property, income ≤ ₹50L.
ITR-2: Salaried with capital gains, foreign assets, or multiple properties.
ITR-3: Individuals/HUFs with business or profession income.
ITR-4 (Sugam): Presumptive taxation scheme (44AD, 44ADA, 44AE).

1. No Demand / No Refund: Return accepted exactly as filed.
2. Refund Determined: Excess TDS/advance tax approved for bank disbursement with interest u/s 244A.
3. Tax Demand: CPC found mathematical errors, disallowed unverified 80C deductions, or caught unreported interest.

Within 12 months of AY end: Tax + Interest + 25% additional tax.
Between 12 to 24 months of AY end: Tax + Interest + 50% additional tax.
Restrictions: Cannot be used to claim a fresh refund or increase an existing refund!

Allowed for 2 domestic journeys in a block of 4 calendar years (Current block: 2022–2025). Applies strictly to actual economy airfare, 1st AC train fare, or state transport bus fares. Hotel stays, sightseeing, and food expenses are strictly ineligible.

Listed Equity & Equity Mutual Funds (112A): Taxed at 12.5% (increased from 10%). The annual exemption limit has been increased from ₹1,00,000 to ₹1,25,000.
Real Estate & Unlisted Assets (112): Taxed at 12.5% without indexation (with grandfathering choice for pre-July 23, 2024 purchases).

• Up to ₹3,00,000: NIL
• ₹3,00,001 to ₹7,00,000: 5%
• ₹7,00,001 to ₹10,00,000: 10%
• ₹10,00,001 to ₹12,00,000: 15%
• ₹12,00,001 to ₹15,00,000: 20%
• Above ₹15,00,000: 30%

An individual is an Indian resident if they stay in India for 182 days or more in the financial year (or 60 days + 365 days across previous 4 years). For Indian citizens visiting India with foreign income > ₹15L, the 60-day threshold is relaxed to 120 days.

4th Character represents entity status: P (Individual/Person), C (Company), H (HUF), F (Partnership Firm/LLP), T (Trust). The 5th character is the first letter of the taxpayer's surname.

Turnover limit up to ₹3 Crore (if digital receipts ≥ 95%). Deemed profit is 6% for digital payments and 8% for cash turnover.

New Regime u/s 115BAC: Maximum rebate is ₹25,000 for total income up to ₹7,00,000.
Old Regime: Maximum rebate is ₹12,500 for total income up to ₹5,00,000. Marginal relief is also granted if income marginally exceeds ₹7 Lakhs.

Mismatches in TDS credit, incorrect calculation of interest under Section 234A/B/C, failure to consider advance tax challans paid, or typing errors in tax computation. Cannot be used to introduce new claims or fresh deductions.

Goods Transport Agency (GTA) services, legal services by advocates, director remuneration, sponsorship services, and copyright transfer services from music composers/authors.

• Employees' Provident Fund (EPF) & Public Provident Fund (PPF)
• Equity Linked Savings Scheme (ELSS mutual funds with 3-year lock-in)
• Life insurance premium (LIC), Sukanya Samriddhi Yojana (SSY)
• Home loan principal repayment & children's school tuition fees.

• Self & Family (<60 yrs): Up to ₹25,000
• Parents (<60 yrs): Additional ₹25,000
• Senior Citizen Parents (≥60 yrs): Up to ₹50,000
• Both Self & Parents are Seniors: Maximum ₹1,00,000.
Includes up to ₹5,000 for preventive health check-ups (cash payments allowed for check-up only).

New Tax Regime (Section 115BAC): Increased from ₹50,000 to ₹75,000 effective for AY 2025-26.
Old Tax Regime: Remains capped at ₹50,000.
Also available to family pensioners up to ₹25,000 (hiked from ₹15,000 u/s 57).

For sales executed on or after July 23, 2024, STCG on listed equity and equity mutual funds has been increased from 15% to 20% (plus 4% cess). STCG on unlisted shares, debt funds, and real estate is taxed at normal slab rates.

• 192: Salary (average slab rate)
• 194A: Bank FD interest (>₹40K / ₹50K seniors at 10%)
• 194C: Contractor payments (1% indiv, 2% co.)
• 194J: Professional fees (10%) & Technical services (2%)
• 194-IA: Property purchase >₹50L (1%).

• Overseas tour packages: 5% up to ₹7 Lakhs; 20% above ₹7 Lakhs.
• Foreign remittances (education loan): 0.5% above ₹7 Lakhs.
• Other remittances (stocks, travel, gifting): 20% above ₹7 Lakhs.
• Motor vehicle purchase >₹10 Lakhs: 1% TCS u/s 206C(1F).

Foreign depository/custodial accounts, shares held in MNC foreign parents (e.g. Google, Apple, Microsoft RSUs), overseas immovable property, and signing authority in foreign accounts during the calendar year.

• Flat 30% tax (+ 4% cess) on gross gains.
• Zero expense deductions allowed except verifiable cost of acquisition (no trading fees, electricity, or internet).
• Zero loss set-off: Crypto losses cannot set off against crypto gains or any other head of income.
• Losses cannot be carried forward to future years.