Income Tax Glossary — Plain-English Meanings of Tax Terms

The new Act's single time unit — the 1 April–31 March period in which you earn income and by whose name you file. Merges the old PY and AY.

Old concept — the year after the income year, when assessment happened. Now abolished (remains a historical term up to AY 2026-27).

Old concept — the year income was earned. Now merged into 'Tax Year'.

The payer (employer/bank/tenant) deducts tax while paying you and deposits it with the government. You claim it as credit.

The seller/authorised dealer collects tax at the point of sale — e.g. LRS remittances, motor-vehicle sales.

A waiver granted after computing tax (Sec 87A → 156). Different from a deduction — deductions shrink income, rebates forgive tax.

An amount subtracted from income (Sec 123/124...). Taxable income = Gross − Deductions.

Income that is never taxed at all (e.g. agricultural income, the exempt slice of HRA, PPF interest).

A salary add-on taxed in your hands — e.g. ESOP gains at exercise (FMV minus exercise price), rent-free housing, excess employer retirement contributions.

The market price used for tax math — e.g. the share price on ESOP exercise day, which becomes both the perquisite base and the capital-gains cost.

Company shares given free on vesting — the full FMV at vesting is taxed as salary; later gains on sale are capital gains.

A cap ensuring a small income rise never causes a bigger tax jump — applies at surcharge thresholds and just above the ₹12L rebate line.

A last-chance return filed up to 48 months late to admit extra income — with graded extra tax of 25%→70%.

The category-wise summary of your AIS — the source of pre-filled figures in your ITR.

Tiny tax on each stock trade — deductible as a business expense for F&O/intraday traders, but not for investors.

Extra tax-on-tax for high incomes —10–25% in the new regime (capped at 25% vs 37% in old).

4% Health & Education Cess charged on (tax + surcharge) for everyone — always the last line of your calculation.

A flat, no-proof subtraction from salary/pension — ₹75,000 (new regime) or ₹50,000 (old regime).

Hindu Undivided Family — a separate tax person with its own PAN, slabs and ₹1.5L 80C limit. Member gifts get clubbed; partition ends it.

Rent deduction without HRA — up to ₹5,000/month for renters who get no HRA, via Form 10BA. Old regime only.

Leave Travel Allowance — tax-free domestic fares (economy, shortest route) twice per 4-year block (current: 2026–2029). Old regime only.

Capital Gains Account Scheme — park gains here before the ITR due date to preserve your Section 54 exemption while house-hunting.

Tax Deduction Account Number — the deductor's ID for TDS. Property (194-IA) and rent (194-IB) are the famous no-TAN exceptions.

Systematic Withdrawal Plan — each payout is an MF redemption taxed FIFO as STCG/LTCG; often beats dividends or annuity on tax.

An extra percentage on tax for high incomes (above ₹50L). Max 25% in the new regime, 37% in the old.

A flat 4% on (tax + surcharge) — payable by everyone who pays tax.

A fairness valve: when income just crosses a rebate/surcharge threshold, the extra tax is capped at the extra income.

For small businesses/professions — declare a fixed % of turnover as income (Sec 58/59) and skip maintaining books.

Crypto, NFTs and similar digital assets. Profits: flat 30% + 1% TDS per transfer; losses can't be set off.

Annual Information Statement — the tax department's record of your financial life (salary, FDs, shares, TDS). Check it before filing.

The new-Act avatar of Form 26AS — the statement of your tax credits (TDS/TCS/advance tax), as reported on the portal.

The TDS certificate your employer issues for salary (Sec 392/old 192). Part A = TDS deposit summary; Part B = salary & deduction breakup.

A return filed after the due date — with a late fee and loss-carry-forward restrictions.

A do-over return to fix your own mistakes — allowed up to 48 months, with graded additional tax.

Assessment without any physical visit — everything online, with random officer allocation.

Adjusting a loss from one head against other income; eligible leftovers carry forward up to 8 years (conditions apply).

Liberalised Remittance Scheme — the framework for sending money abroad, with TCS rules attached.

Resident (ROR), Resident-but-Not-Ordinarily-Resident (RNOR), or Non-Resident (NRI) — determines the scope of Indian taxation on you.

NRE: repatriable account for foreign earnings — interest exempt for NRIs. NRO: account for Indian income — interest taxable.

Double Taxation Avoidance Agreement — a treaty ensuring the same income isn't fully taxed in two countries; claimed via TRC + Form 10F.

A certificate from your country of residence proving where you're a tax resident — required to claim DTAA benefits.