Indian Tax Glossary — 60+ Terms (GST, Income Tax, TDS, Capital Gains)

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GST — Goods and Services Tax

GST (Goods and Services Tax): A unified indirect tax in India, replacing VAT, service tax, and most state-and-centre taxes. Effective 1 July 2017. Most goods and services fall into 5 slabs: 0%, 5%, 12%, 18%, 28%. Calculate GST →
CGST (Central GST): Half of GST on intra-state transactions, paid to the central government. On 18% GST, CGST = 9%.
SGST (State GST): Half of GST on intra-state transactions, paid to the state government. On 18% GST, SGST = 9%.
IGST (Integrated GST): Full GST on inter-state transactions, collected by the central government and shared with the destination state.
UTGST (Union Territory GST): Replaces SGST in Union Territories without a legislature (Chandigarh, Lakshadweep, Andaman & Nicobar, Daman & Diu, Dadra & Nagar Haveli).
GSTIN: 15-character unique GST identification number for registered taxpayers. Format: 2 digits state code + 10-char PAN + 1 entity number + 'Z' + 1 checksum. Validate a GSTIN →
HSN Code: Harmonized System of Nomenclature — 4 to 8-digit code classifying goods for GST. Mandatory on tax invoices for businesses with turnover > ₹5 crore.
SAC Code: Services Accounting Code — equivalent of HSN but for services. 6-digit code under GST.
ITC (Input Tax Credit): GST paid on purchases that you can set off against GST collected on sales. Reduces your net cash outflow. Subject to conditions like Section 16 of CGST Act.
RCM (Reverse Charge Mechanism): The recipient pays GST instead of the supplier. Applies to certain services (lawyer fees, GTA transport, import of services) and unregistered-supplier purchases above threshold.
GSTR-1: Monthly (or quarterly) return reporting outward supplies. Due 11th of next month (monthly) or 13th of month after quarter (QRMP).
GSTR-3B: Monthly summary return for tax payment. Due 20th of next month (monthly) or 22nd/24th (QRMP). Late fee calculator →
GSTR-9: Annual GST return. Due 31st December of next FY. Mandatory for taxpayers with turnover > ₹2 crore. Late fee ₹200/day, capped at 0.5% of turnover.
QRMP Scheme: Quarterly Returns Monthly Payment. Available for taxpayers with annual turnover up to ₹5 crore. File GSTR-1 and 3B quarterly but pay tax monthly.
Composition Scheme: Simplified GST scheme for small businesses (turnover up to ₹1.5 crore). Pay flat 1% (traders), 5% (restaurants), 6% (services). No ITC available.
e-Invoicing: Generating an Invoice Reference Number (IRN) on the IRP portal for B2B invoices. Mandatory for taxpayers with turnover > ₹5 crore.
e-Way Bill: Electronic transit document for movement of goods worth > ₹50,000. Generated on ewaybillgst.gov.in.
Place of Supply: The state where the supply is deemed to be made. Determines whether the supply is intra-state (CGST + SGST) or inter-state (IGST).

Income Tax

PAN: Permanent Account Number — 10-character alphanumeric ID issued by the Income Tax Department. Format: AAAAA####A. Required for all financial transactions above thresholds.
TAN: Tax Deduction Account Number — 10-char ID for entities deducting TDS. Required to deposit TDS and file TDS returns.
ITR: Income Tax Return. Filed annually with the IT Department. Form types: ITR-1 (salary up to ₹50L), ITR-2 (capital gains), ITR-3 (business), ITR-4 (presumptive scheme), etc.
Form 16: Annual TDS certificate issued by employer to salaried employee. Shows salary paid, deductions, and tax deducted under Section 192. Issued by 15 June.
Form 16A: Quarterly TDS certificate for non-salary payments (e.g., freelance fees deducted under 194J). Issued by deductor.
Form 26AS: Consolidated tax statement showing all TDS, TCS, advance tax, and high-value transactions linked to your PAN. Available on the income tax e-filing portal.
AIS / TIS: Annual Information Statement / Taxpayer Information Summary. Newer version of Form 26AS with more granular data — interest, dividends, securities transactions, foreign remittances.
Section 80C: Deduction of up to ₹1,50,000 per FY for investments in PPF, EPF, ELSS, life insurance premium, home loan principal, NSC, ULIP, tuition fees, etc. Old Regime only.
Section 80D: Deduction for health insurance premium. ₹25K self/family + ₹50K parents (senior); total ₹1L. Old Regime only.
Section 87A Rebate: Tax rebate for resident individuals. Old: up to ₹12,500 if income ≤ ₹5L. New (post-Budget 2025): full rebate making tax zero up to ₹12L taxable income.
Standard Deduction: Flat deduction from salary income. Old Regime: ₹50,000. New Regime: ₹75,000 (Budget 2024).
Surcharge: Additional tax on high-income earners. Slabs: 10% (income > ₹50L), 15% (>₹1cr), 25% (>₹2cr), 37% (>₹5cr, Old Regime). New Regime caps at 25%.
Health and Education Cess: 4% cess on income tax + surcharge. Funds health and education programmes.
HRA (House Rent Allowance): Salary component for rent. Exempt under Section 10(13A) up to least of: actual HRA, rent − 10% basic, 50% basic (metro) or 40% (non-metro). HRA calculator →
LTA (Leave Travel Allowance): Exemption for domestic travel expenses, twice in a 4-year block. Old Regime only. Covers train / flight / bus fare for self + family.
Gratuity: Lumpsum paid by employer at exit, after 5+ years of service. 15/26 days × last basic × years of service. Tax-exempt up to ₹20 lakh under Sec 10(10).

TDS — Tax Deducted at Source

TDS: Tax Deducted at Source — payer deducts a % of payment as advance income tax and deposits with government. Recipient claims it in their ITR. TDS calculator →
Section 194C: TDS on contractor payments. 1% if individual/HUF, 2% otherwise. Threshold ₹30K single / ₹1L FY aggregate.
Section 194J: TDS on professional fees (10%) or technical services (2%). Threshold ₹30K per nature per FY.
Section 194I: TDS on rent. 10% land/building/furniture, 2% plant/machinery. Threshold ₹2.4L per FY per landlord.
Section 194IA: 1% TDS on property purchase ≥ ₹50L (excluding agricultural land). Buyer deducts and deposits via Form 26QB.
Section 194IB: 5% TDS on rent paid by individual/HUF (not under audit) if monthly rent > ₹50K. Once a year on last month.
Section 206AA: If deductee doesn't furnish PAN, TDS rate becomes higher of (section rate) or 20%. Capped 5% for Sections 194Q and 194O.
Form 26QB: Challan-cum-statement for property TDS (Section 194IA). One-time form filed by buyer within 30 days of payment.
Form 24Q: Quarterly TDS return for salary deductions (Section 192). Filed by employer.
Form 26Q: Quarterly TDS return for non-salary payments to residents (194C, 194J, 194I, 194H, etc.).

Capital Gains

LTCG (Long-Term Capital Gains): Gain on capital assets held beyond a threshold (12 mo equity, 24 mo property/gold/unlisted, 36 mo grandfathered debt). Equity LTCG: 12.5% above ₹1.25L. CG calculator →
STCG (Short-Term Capital Gains): Gain on assets held below the threshold. Equity STCG: 20% (Sec 111A). Other assets: slab rate.
Indexation: Adjusting cost upwards using Cost Inflation Index, to compute LTCG on inflation-adjusted basis. Available for property bought on or before 23 July 2024 and grandfathered debt MFs.
CII (Cost Inflation Index): Annual index notified by CBDT for indexation. Base 2001-02 = 100. FY 2024-25 = 363. Updated each May.
Section 54: LTCG exemption on residential property if reinvested in another residential house within 2 years (purchase) / 3 years (construction).
Section 54F: LTCG exemption on any long-term asset (other than residential house) if entire net consideration is reinvested in residential property.
Section 54EC: Up to ₹50 lakh of LTCG exempt if invested in NHAI / REC bonds within 6 months of sale. 5-year lock-in.
Section 112A: 12.5% LTCG on listed equity / equity MF (post-Budget 2024), with ₹1.25 lakh annual exemption.
Section 111A: 20% STCG on listed equity (post-Budget 2024, was 15% earlier).

Loans & EMIs

EMI (Equated Monthly Installment): Fixed monthly payment on a loan, covering principal + interest. EMI calculator →
Reducing Balance: Interest computed on outstanding principal each month. Standard for Indian retail loans. Effective rate equals nominal rate.
Flat Rate: Interest computed on full original principal for entire tenure. Effective cost is roughly 1.8× the quoted rate. Avoid unless explicitly favourable.
Floating Rate: Interest tied to a benchmark (RBI repo + spread). Common on home loans. EMI/tenure adjusts as rate changes.
Fixed Rate: Interest stays the same for the loan tenure (or a fixed initial period). Common on car / personal loans.
Repo Rate: Rate at which RBI lends to commercial banks. Floor benchmark for floating-rate retail loans (e.g., RLLR, Repo+Spread).
Foreclosure / Pre-payment: Closing the loan early. RBI mandates no foreclosure charge on floating-rate home loans for individuals.

Investment

PPF (Public Provident Fund): Government-backed long-term savings. 15-year lock-in (extendable in 5-year blocks). Current rate 7.1%. EEE — deposit, interest, maturity all tax-free. PPF calculator →
EPF (Employees Provident Fund): Mandatory retirement savings for salaried. Both employer and employee contribute 12% of basic. Statutory cap on basic ₹15,000/month. Current rate ~8.25%.
NPS (National Pension System): Voluntary retirement savings. Section 80CCD(1) within 80C, 80CCD(1B) extra ₹50K, 80CCD(2) employer share. Mix of equity, corporate bonds, government securities.
FD (Fixed Deposit): Term deposit at a bank. 7 days to 10 years. Quarterly compounding standard. Senior citizens get +0.5%. Interest taxable at slab rate. FD calculator →
ELSS: Equity-Linked Savings Scheme — tax-saving mutual fund. 3-year lock-in (shortest among 80C). Equity-oriented, post-tax LTCG of 12.5% above ₹1.25L.
NSC (National Savings Certificate): 5-year post office savings instrument. Current rate ~7.7%. 80C eligible. Interest reinvested annually (also 80C).
KVP (Kisan Vikas Patra): Post office savings. Doubles money in ~115 months at current 7.5% rate. No 80C deduction; interest taxable.
SCSS (Senior Citizens Savings Scheme): Available only for citizens aged 60+. 5-year tenure (extendable). Quarterly interest payout. 8.2% current rate. 80C eligible.
Mutual Fund: Pooled investment vehicle. Equity / debt / hybrid / liquid. SEBI-regulated. Equity MFs taxed under Sec 111A/112A; debt MFs at slab rate (post-April-2023).
SIP: Systematic Investment Plan — fixed monthly investment in a mutual fund. Rupee-cost averaging.
SGB (Sovereign Gold Bond): RBI-issued gold bonds. 8-year tenure (5-year exit window). 2.5% pa interest (taxable). Capital gain tax-exempt at maturity. Listed on exchanges.

Use a calculator

Each glossary term links to a relevant calculator. Or browse all 15:

GST Calculator

CGST/SGST/IGST.

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Income Tax

Old vs new regime.

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TDS Calculator

194C, 194J, 194I.

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All 15 tools

Full suite.

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