Reference

Tax and compliance glossary

32 terms, each defined in one plain sentence — and then what it actually means for you in practice.

Income tax

Aadhaar-PAN Linking: Every PAN must be linked to the holder's Aadhaar, and an unlinked PAN becomes inoperative — which stops return filing, blocks refunds and forces TDS at the higher 20% rate.
Advance Tax: Advance tax is income tax paid in instalments during the year it is earned, required from anyone whose total tax liability after TDS exceeds ₹10,000.
AISAnnual Information Statement: The AIS is the Income Tax Department's record of your financial transactions for a year — interest, dividends, share sales, property deals and large cash movements — assembled from reports filed by banks and other institutions.
Assessment YearAY: The assessment year is the twelve months following the financial year in which income was earned, and it is the year in which that income is assessed and taxed.
Capital Gains: A capital gain is the profit from selling a capital asset such as shares, mutual funds or property, taxed at rates that depend on how long the asset was held.
Form 16: Form 16 is the certificate an employer issues each year showing the salary paid to an employee and the tax deducted from it, and it is the primary document used to file a salaried person's return.
Form 26ASAnnual Tax Statement: Form 26AS is the consolidated tax statement showing every rupee of tax deducted, collected or paid against your PAN in a financial year.
ITRIncome Tax Return: An ITR is the annual statement of income, deductions and tax paid that a taxpayer files with the Income Tax Department, normally by 31 July for individuals who are not subject to audit.
PANPermanent Account Number: A PAN is the ten-character alphanumeric identifier the Income Tax Department issues to every taxpayer in India, and it is required to file a return, open a bank account or make most large transactions.
TANTax Deduction and Collection Account Number: A TAN is the ten-character number that anyone who deducts tax at source must quote on every TDS return, challan and certificate they issue.
TDSTax Deducted at Source: TDS is tax collected at the moment income is paid rather than at the end of the year — the payer withholds a percentage and deposits it against the recipient's PAN.

GST

Composition Scheme: The composition scheme lets small businesses pay GST at a flat percentage of turnover instead of the normal rate, in exchange for giving up input tax credit.
GST Registration Threshold: GST registration becomes compulsory once annual turnover crosses ₹40 lakh for goods or ₹20 lakh for services in most states, with lower limits in the special category states.
GSTINGST Identification Number: A GSTIN is the fifteen-character number that identifies a business registered under GST, built from the state code, the holder's PAN and a check digit.
GSTR-1: GSTR-1 is the monthly or quarterly return in which a registered business reports every outward supply it made — effectively its sales register filed with the government.
GSTR-3B: GSTR-3B is the monthly summary return through which a business declares its total sales, claims input tax credit and pays the net GST due.
Input Tax CreditITC: Input tax credit is the GST you paid on business purchases, which you set off against the GST you collect on sales so that tax applies only to the value you added.
QRMPQuarterly Return Monthly Payment: QRMP is the scheme that lets businesses with turnover up to ₹5 crore file GST returns quarterly while still paying tax monthly.
Reverse Charge MechanismRCM: Under reverse charge the buyer pays GST directly to the government instead of the supplier collecting it, which applies to specified supplies and to purchases from unregistered persons.

Company law

DINDirector Identification Number: A DIN is the eight-digit number the Ministry of Corporate Affairs allots to an individual so they can be appointed a director of a company, and it is held for life.
DSCDigital Signature Certificate: A DSC is a cryptographic certificate on a USB token that serves as a legally valid electronic signature for filings with the MCA, the income tax portal and the GST portal.
MCAMinistry of Corporate Affairs: The Ministry of Corporate Affairs is the central government ministry that administers the Companies Act and the LLP Act, and runs the portal through which all company filings are made.
ROCRegistrar of Companies: The Registrar of Companies is the Ministry of Corporate Affairs office that incorporates companies and holds their statutory filings, with a registrar for each state or group of states.

Filing

Belated Return: A belated return is an income tax return filed after the due date but before 31 December of the assessment year, under section 139(4).
Updated ReturnITR-U: An updated return under section 139(8A) lets a taxpayer declare income they missed up to four years after the end of the assessment year, at the cost of additional tax on top of the normal liability.

Business structures

LLPLimited Liability Partnership: An LLP is a business structure combining a partnership's internal flexibility with a company's limited liability, so a partner's personal assets are not at risk for the firm's debts.
OPCOne Person Company: A One Person Company is a private limited company with a single shareholder, giving a solo founder limited liability and a corporate identity without needing a second member.
Partnership Firm: A partnership firm is a business owned by two or more people under a partnership deed, in which the partners share profits and bear unlimited joint liability for the firm's debts.
Sole Proprietorship: A sole proprietorship is a business owned by one person with no legal separation between the owner and the business, so the owner is personally liable for everything it owes.
Udyam RegistrationMSME Registration: Udyam registration is the government's free online recognition of a micro, small or medium enterprise, based on investment and turnover, and it is the gateway to MSME benefits.

Intellectual property

Trademark Class: A trademark class is one of the 45 categories of the Nice Classification, and a trademark is only protected in the classes it is registered in.
Trademark Objection: A trademark objection is the examiner's written refusal to accept an application as filed, and it must be answered within thirty days or the application is treated as abandoned.