Tax and GST glossary
50 terms from your tax notices, payslips and GST returns, explained in plain English with rates, due dates and examples.
Income tax
- Advance taxAdvance tax is income tax paid in instalments during the financial year, instead of all at once after it ends, by anyone whose tax for the year after TDS is ₹10,000 or more.
- Annual Information Statement (AIS)The Annual Information Statement (AIS) is a detailed record on the income tax portal of your financial transactions for the year, reported by banks, employers, brokers and others, used to pre-fill and check your return.
- Assessment year (AY)The assessment year (AY) is the year after the financial year in which income is earned, when that income is assessed and taxed. Income earned in FY 2025-26 is assessed in AY 2026-27.
- Belated returnA belated return is an income tax return filed after the original due date but before the end of the assessment year's extended window, which is 31 December. It carries a late fee and some lost benefits.
- Form 26ASForm 26AS is your annual tax credit statement on the income tax portal, showing TDS and TCS deducted against your PAN, advance and self-assessment tax paid, and refunds.
- Hindu undivided family (HUF)A Hindu undivided family (HUF) is a family unit of persons descended from a common ancestor, with their spouses, that is taxed as a separate person with its own PAN, slab rates and deductions.
- House rent allowance (HRA)House rent allowance (HRA) is a part of salary paid towards rent. Under the old tax regime, salaried employees who pay rent can claim part of it as tax-free; the new regime does not allow the exemption.
- Income taxIncome tax is a direct tax the central government levies on the income of individuals, HUFs, firms and companies. It is charged on taxable income at rates set every year by the Finance Act.
- Income tax refundAn income tax refund is money the Income Tax Department returns when the tax you paid through TDS, TCS or advance tax is more than the tax you actually owe for the year.
- Income tax return (ITR)An income tax return (ITR) is the form you file with the Income Tax Department to report your income, deductions and tax paid for a year, and to claim any refund due.
- New tax regimeThe new tax regime is the default way individuals and HUFs are taxed: lower slab rates in exchange for giving up most deductions and exemptions such as 80C, 80D and HRA.
- Permanent account number (PAN)A PAN is the 10-character alphanumeric identity the Income Tax Department issues to every taxpayer. It is needed to file returns, receive TDS credit and carry out high-value transactions.
- Rebate under section 87AThe section 87A rebate cancels income tax for resident individuals with low taxable income: up to ₹60,000 under the new regime for income up to ₹12 lakh, and up to ₹12,500 under the old regime for income up to ₹5 lakh.
- Rectification of mistakesRectification is a request to the Income Tax Department under section 154 to correct a mistake apparent from the record in an order or intimation, such as a TDS credit or deduction wrongly left out in a 143(1) intimation.
- Revised returnA revised return is a fresh income tax return filed to correct a mistake or omission in a return you already filed, replacing the original one.
- Section 80CSection 80C lets individuals and HUFs under the old tax regime deduct up to ₹1.5 lakh a year for specified investments and payments, such as EPF, PPF, ELSS, life insurance and home-loan principal.
- Section 80DSection 80D gives a deduction under the old tax regime for health insurance premiums and preventive health check-ups paid for yourself, your family and your parents.
- Standard deductionThe standard deduction is a flat amount subtracted from salary or pension income before tax, without any proof of expenses: ₹75,000 under the new regime and ₹50,000 under the old regime.
- Tax assessmentTax assessment is the process by which the Income Tax Department checks a return and fixes the taxpayer's final income and tax, either automatically or through a detailed scrutiny.
- Taxable incomeTaxable income is the part of your income on which tax is actually calculated: gross total income from all five heads, minus the deductions allowed under your tax regime.
- Updated return (ITR-U)An updated return (ITR-U) lets you report income you missed after the normal and belated deadlines have passed, within 48 months from the end of the assessment year, by paying additional tax.
GST
- E-invoicingE-invoicing is the system under which larger businesses report each B2B invoice to the government's Invoice Registration Portal (IRP) and get an Invoice Reference Number (IRN) and QR code before issuing it.
- E-way billAn e-way bill is an electronic document generated on the GST e-way bill portal before goods worth more than ₹50,000 are moved, recording the consignment, the parties and the vehicle.
- Goods and services tax (GST)GST is India's indirect tax on the supply of goods and services, in force since 1 July 2017. Businesses collect it from customers, claim credit for GST paid on purchases, and pay the difference to the government.
- GST composition schemeThe GST composition scheme lets small businesses pay GST at a low flat rate on turnover with simpler returns, in exchange for giving up input tax credit and inter-state sales.
- GST identification number (GSTIN)A GSTIN is the 15-character number every GST-registered business gets, one for each state it is registered in. It is built from the state code, the business's PAN, an entity number and a check digit.
- GST refundA GST refund is the return of excess GST to a business, most often to exporters and to businesses whose input tax rate is higher than their output tax rate (an inverted duty structure).
- GST returnsGST returns are the periodic statements a registered business files on the GST portal to report its sales, purchases, tax collected and input tax credit, and to pay tax due.
- GSTR-2BGSTR-2B is a monthly auto-drafted statement on the GST portal showing the input tax credit available to you, based on invoices your suppliers have reported. It does not change once generated.
- HSN and SAC codesHSN (Harmonised System of Nomenclature) codes classify goods and SAC (Services Accounting Codes) classify services under GST. The code decides the GST rate and must be shown on invoices.
- Input tax credit (ITC)Input tax credit (ITC) lets a GST-registered business subtract the GST it paid on purchases from the GST it collects on sales, so tax is paid only on the value it adds.
- Letter of undertaking (LUT)A letter of undertaking (LUT) is a declaration filed on the GST portal that lets exporters ship goods or services without paying IGST upfront, and then claim refunds of unused input tax credit.
- Reverse charge mechanism (RCM)Under the reverse charge mechanism (RCM), the buyer of certain goods or services pays the GST directly to the government instead of the supplier, and then claims it as input tax credit if eligible.
TDS & TCS
- Form 16Form 16 is the certificate an employer gives each employee showing salary paid and income tax deducted at source during the financial year. It is the main document for filing a salaried ITR.
- Tax collected at source (TCS)Tax collected at source (TCS) is tax a seller collects from the buyer, over and above the price, on specified sales such as scrap, motor vehicles over ₹10 lakh and foreign remittances, and deposits with the government.
- Tax deducted at source (TDS)Tax deducted at source (TDS) is income tax that a payer deducts before paying salary, rent, professional fees, contractor bills or interest, and deposits with the government against the payee's PAN.
- Tax deduction and collection account number (TAN)A TAN is a 10-character number every person who deducts or collects tax at source must hold and quote in TDS and TCS payments, returns and certificates.
- TDS on property purchaseWhen you buy property worth ₹50 lakh or more from a resident seller, you must deduct 1% TDS under section 194-IA from the payment and deposit it with Form 26QB.
Business & audit
- Chartered Accountant (CA)A chartered accountant (CA) is a member of the Institute of Chartered Accountants of India (ICAI). Only a CA holding a certificate of practice can sign statutory audits, tax audits and many certificates.
- PayrollPayroll is the process of calculating and paying employee salaries, including deductions for TDS, provident fund and ESI, and filing the related statutory returns.
- Presumptive taxationPresumptive taxation lets small businesses and professionals declare income as a fixed percentage of turnover or receipts, under sections 44AD, 44ADA and 44AE, instead of keeping full books.
- Statutory auditA statutory audit is an audit required by law, in which an independent chartered accountant examines an entity's financial statements and reports whether they give a true and fair view.
- Tax auditA tax audit is an audit of a business's or professional's accounts under section 44AB of the Income-tax Act, required above set turnover or receipt limits, with a report filed by a practising CA.
- Tax consultantA tax consultant prepares and files tax returns, handles GST and TDS compliance, plans taxes and represents clients before the tax department. Unlike a practising CA, a tax consultant cannot sign audit reports.
- Udyam registrationUdyam registration is the free online registration that classifies a business as a micro, small or medium enterprise (MSME), unlocking benefits such as priority lending, subsidies and protection against delayed payments.
- Unique Document Identification Number (UDIN)A UDIN is an 18-character number a chartered accountant generates on ICAI's portal for every certificate, audit report or attestation they sign, so anyone can verify the document is genuine.
Property & capital gains
- Capital gains taxCapital gains tax is income tax on the profit from selling a capital asset such as property, shares, mutual funds or gold. The rate depends on the asset and on whether the gain is short-term or long-term.
- Cost inflation index (CII)The cost inflation index (CII) is a yearly number notified by CBDT to adjust an asset's purchase cost for inflation (indexation), which reduces the taxable long-term capital gain.
- Section 54 exemptionSection 54 exempts long-term capital gains from selling a residential house if the gain is reinvested in another residential house in India within the allowed time, up to ₹10 crore.
- Stamp dutyStamp duty is a state tax paid on documents such as property sale deeds, gift deeds and leases. In Rajasthan, it is charged on the higher of the agreed price and the government's DLC rate for the property.
Talk to a Jodhpur tax expert today
Send your documents on WhatsApp or book a free 15-minute call. We reply the same working day.