Indian legal & tax glossary

110 key Indian legal and tax terms — income tax, GST, the new criminal codes and company law — explained in plain English. Free to use and share.

Income Tax

Assessment Year (AY)

The year in which income earned in the previous financial year is assessed and taxed. Income of FY 2025-26 is taxed in AY 2026-27.

Financial Year (FY)

The year in which you earn income, running 1 April to 31 March in India. It is also called the 'previous year' for tax purposes.

Section 80C

A deduction (old regime) of up to ₹1,50,000 for investments and payments like PPF, ELSS, life insurance premium, EPF, home-loan principal and children's tuition.

Section 80D

A deduction (old regime) for health-insurance premiums — generally up to ₹25,000 for self/family and an additional ₹25,000 (₹50,000 for senior-citizen parents).

Section 87A rebate

A rebate that makes tax zero for incomes up to a threshold. Under the new regime for AY 2026-27, income up to ₹12 lakh is effectively tax-free via a rebate of up to ₹60,000.

Standard Deduction

A flat deduction from salary income — ₹75,000 under the new regime and ₹50,000 under the old regime for AY 2026-27.

TDS (Tax Deducted at Source)

Tax the payer deducts before paying you (salary, rent, interest, professional fees, etc.) and deposits with the government against your PAN. You claim credit when filing your return.

Advance Tax

Tax paid in instalments during the year (by 15 June, 15 Sept, 15 Dec and 15 March) if your total tax liability for the year is ₹10,000 or more.

AIS (Annual Information Statement)

A detailed statement of your financial transactions (interest, dividends, securities, property, etc.) reported to the Income Tax Department. Reconcile it with your return before filing.

Form 26AS

Your tax credit statement — it shows TDS/TCS deducted, advance tax paid and refunds. Match it with your TDS certificates before filing.

Form 16

The TDS certificate your employer issues for salary, showing gross salary, exemptions, deductions and TDS deducted. Form 16A is for non-salary TDS.

ITR (Income Tax Return)

The form you file to report income and tax. ITR-1 (Sahaj) suits most salaried individuals; ITR-2/3/4 apply to capital gains, business or presumptive income.

LTCG / STCG

Long-Term and Short-Term Capital Gains — profit on selling an asset, taxed differently by holding period. Listed-equity LTCG above ₹1.25 lakh is taxed at 12.5%; STCG at 20%.

Section 44ADA

A presumptive scheme letting eligible professionals declare 50% of gross receipts as income (up to a turnover limit) without detailed books or audit. Filed via ITR-4.

Section 143(1) intimation

An automated notice after your return is processed, showing the department's computation and any refund or demand. You can respond or rectify under Section 154 if it is wrong.

PAN

Permanent Account Number — a 10-character ID issued by the Income Tax Department, mandatory for filing returns and most high-value financial transactions.

TCS (Tax Collected at Source)

Tax a seller collects from the buyer on certain transactions (e.g. some foreign remittances under LRS, or a car above ₹10 lakh) and deposits against the buyer's PAN.

Surcharge

An additional levy on income tax for higher incomes (e.g. above ₹50 lakh), at rates that rise with income. The new regime caps the top surcharge rate lower than the old one.

Health & Education Cess

A 4% cess charged on your income tax (plus surcharge), funding health and education. It applies under both regimes.

Gross Total Income vs Total Income

Gross Total Income is income from all heads added up; Total Income is what remains after Chapter VI-A deductions (80C, 80D, etc.) and is what tax is charged on.

Belated Return

A return filed after the due date but before the final deadline, under Section 139(4), usually with a late fee under Section 234F.

Revised Return

A corrected return filed under Section 139(5) to fix an error or omission in an original return, before the prescribed deadline.

Section 80E

A deduction (old regime) for interest paid on an education loan for higher studies — no upper limit, available for up to 8 years.

Section 80TTA / 80TTB

80TTA allows up to ₹10,000 of savings-account interest; 80TTB allows up to ₹50,000 of interest (savings + deposits) for senior citizens. Old regime.

Section 24(b)

A deduction (old regime) for interest on a home loan — up to ₹2,00,000 a year for a self-occupied house.

Section 54

Exempts long-term capital gains on selling a residential house if you reinvest the gain in another residential house within the prescribed time.

Section 115BBH

Taxes gains on Virtual Digital Assets (crypto, NFTs) at a flat 30%, allowing only cost as a deduction and no set-off of losses.

Form 15G / 15H

Self-declarations used to avoid TDS on interest when total income was below the taxable limit, with 15H for senior citizens. Both were replaced by the unified Form 121 from 1 April 2026; declarations filed before that date remain valid for their own year.

Form 121

The single declaration that replaced Forms 15G and 15H from 1 April 2026 under section 393(6) of the Income Tax Act 2025. A resident individual of any age, or an HUF, files it with each payer to stop TDS where estimated tax for the tax year is nil. PAN is mandatory and it lasts one tax year.

Standard Deduction

A flat deduction from salary income — ₹75,000 under the new regime and ₹50,000 under the old regime for AY 2026-27 — claimed without any proof.

Section 87A Rebate

A rebate that reduces tax to nil for resident individuals with income up to a limit. Under the new regime for AY 2026-27 it makes income up to ₹12 lakh effectively tax-free.

Advance Tax

Tax paid in instalments during the year (not at the end) when your total tax liability for the year exceeds ₹10,000, under Sections 208–211.

Capital Gains (LTCG / STCG)

Profit on selling a capital asset. Long-term (LTCG) and short-term (STCG) are taxed at different rates depending on the asset and holding period.

Section 80CCD(1B)

An extra deduction of up to ₹50,000 for contributions to the National Pension System (NPS), over and above the ₹1.5 lakh limit of Section 80C (old regime).

Belated Return

An income-tax return filed after the due date under Section 139(4), generally up to 31 December of the assessment year, with a late fee under Section 234F.

Revised Return

A return filed under Section 139(5) to correct a mistake or omission in a return already filed, within the year's deadline. It replaces the earlier return.

Presumptive Taxation (44AD / 44ADA)

A scheme letting eligible small businesses (44AD) and professionals (44ADA) declare income at a prescribed percentage of turnover/receipts without full books.

DTAA

Double Taxation Avoidance Agreement — a treaty between India and another country that prevents the same income being taxed twice, important for NRIs.

RNOR

Resident but Not Ordinarily Resident — a transitional tax status (often for returning NRIs) where foreign income is generally not taxed in India for a few years.

GST

GSTIN

A 15-digit Goods and Services Tax Identification Number assigned to every registered taxpayer, based on the state code and the business PAN.

Input Tax Credit (ITC)

Credit for the GST you paid on business purchases, set off against the GST you collect on sales. It requires a valid invoice and the supplier actually paying the tax (visible in GSTR-2B).

GSTR-1

The monthly/quarterly return of your outward supplies (sales invoices). It feeds the buyer's GSTR-2B.

GSTR-3B

A monthly summary return where you declare total sales, claim ITC and pay net GST. Generally due by the 20th of the following month.

GSTR-2B

An auto-drafted statement of the ITC available to you, generated from your suppliers' filings. ITC claims should be reconciled against it.

CGST / SGST / IGST

The components of GST: CGST + SGST apply to sales within a state; IGST applies to inter-state sales and imports.

Reverse Charge (RCM)

A mechanism where the recipient, not the supplier, pays GST to the government — applied to certain notified supplies and purchases from unregistered persons.

Composition Scheme

A simplified scheme for small taxpayers (below a turnover limit) to pay GST at a low flat rate without claiming ITC, filing CMP-08 quarterly and GSTR-4 annually.

E-way Bill

An electronic document required to move goods worth more than ₹50,000, generated on the e-way bill portal with a validity based on distance.

HSN / SAC code

Harmonised System of Nomenclature (goods) and Service Accounting Code (services) — classification codes that determine the applicable GST rate.

DRC-01

A show-cause notice issued under the GST law (Section 73 for non-fraud, Section 74 for fraud) before a tax demand is confirmed. You reply via DRC-06.

Aggregate Turnover

All-India, PAN-based total of taxable, exempt and export supplies (excluding GST). It decides whether you must register and whether you can opt for composition.

Place of Supply

The rules that decide where a supply is taxed — and therefore whether CGST+SGST (intra-state) or IGST (inter-state) applies.

Zero-rated Supply

Exports and supplies to SEZs — taxed at 0% while still allowing ITC, claimed either under a LUT (without paying IGST) or by paying and seeking a refund.

Exempt vs Nil-rated

Nil-rated supplies attract a 0% rate; exempt supplies attract no GST at all. ITC is generally not available on inputs used for exempt supplies.

LUT (Letter of Undertaking)

A document that lets exporters supply goods/services without paying IGST upfront, instead of the pay-and-refund route.

GSTR-9

The annual GST return consolidating a year's monthly/quarterly returns, required for regular taxpayers above a turnover threshold.

GSTR-9C

A self-certified reconciliation statement between the annual return and audited financials, required above a higher turnover threshold.

QRMP Scheme

Quarterly Return, Monthly Payment — lets small taxpayers (below a turnover limit) file GSTR-1 and GSTR-3B quarterly while paying tax monthly.

DRC-03

The form used to make a voluntary GST payment — for example, to pay up a shortfall found during an audit or self-review.

Section 73 vs 74 (GST)

Section 73 raises a demand for a genuine (non-fraud) short payment with limited penalty; Section 74 applies to fraud or wilful suppression, with much higher penalties.

E-invoice / IRN

Mandatory electronic invoicing above a turnover threshold — each B2B invoice gets an Invoice Reference Number (IRN) and QR code from the government portal.

Casual Taxable Person

Someone who occasionally supplies in a state where they have no fixed place of business (e.g. at an exhibition) and takes a temporary GST registration.

GSTR-2B

An auto-drafted, static statement of your eligible input tax credit for a month, generated from your suppliers' filings. Reconcile your ITC claim against it.

QRMP Scheme

Quarterly Return, Monthly Payment — small taxpayers (turnover up to ₹5 crore) file GSTR-1 and GSTR-3B quarterly while paying tax monthly.

LUT (Letter of Undertaking)

A document that lets exporters supply goods/services without paying IGST upfront, instead of paying and claiming a refund. Filed annually on the GST portal.

Composition Scheme

A simplified GST scheme for small taxpayers who pay a flat low percentage of turnover but cannot charge GST on invoices or claim input tax credit.

E-way Bill

An electronic document required for moving goods above a notified value, generated on the e-way bill portal, containing consignment and transport details.

DRC-01

A show-cause notice issued under the CGST Act when the department believes tax was short-paid or ITC wrongly availed. You reply (e.g. via DRC-06) before the deadline.

Legal

FIR (First Information Report)

The first record of a cognizable offence, registered by the police. Registration is mandatory when the information discloses a cognizable offence (Lalita Kumari, 2014).

Bail

Release of an accused from custody, often on conditions/sureties, pending trial. Bailable offences carry bail as a right; non-bailable ones are at the court's discretion.

Anticipatory Bail

Pre-arrest bail obtained under Section 482 of the BNSS 2023 (old CrPC 438) when a person fears arrest in a non-bailable case.

BNS / BNSS / BSA 2023

The new criminal codes effective 1 July 2024: Bharatiya Nyaya Sanhita (replaces the IPC), Bharatiya Nagarik Suraksha Sanhita (replaces the CrPC) and Bharatiya Sakshya Adhiniyam (replaces the Evidence Act).

Cognizable vs Non-cognizable

In a cognizable offence the police can register an FIR and arrest without a warrant; in a non-cognizable offence they generally need the magistrate's order.

Section 138 NI Act

The cheque-bounce provision: on dishonour you send a written demand within 30 days, the drawer has 15 days to pay, and a complaint can be filed within 30 days after that.

Affidavit

A written statement of facts sworn on oath before a notary or authorised officer, used as evidence in legal and administrative matters.

Charge Sheet

The final report the police file in court after investigating a cognizable offence (under BNSS), setting out the evidence and the accused.

Summons vs Warrant

A summons directs a person to appear or produce a document; a warrant authorises the police to arrest a person or seize property.

Writ Petition

A petition to a High Court (Article 226) or the Supreme Court (Article 32) to enforce fundamental or legal rights — e.g. habeas corpus, mandamus, certiorari.

PIL (Public Interest Litigation)

Litigation filed in the interest of the public, where the petitioner need not be the directly affected person, to address a matter of public concern.

Limitation Act

The law prescribing time limits within which different suits, appeals and applications must be filed; missing the limit can bar your claim.

Power of Attorney

A document authorising another person to act on your behalf — general (broad powers) or special (a specific task). Some require registration.

Notarisation vs Registration

Notarisation is attestation of a document by a notary; registration records it with the Sub-Registrar and is mandatory for documents like sale deeds and long leases.

Lok Adalat

A forum for amicable, no-cost settlement of disputes; a settlement reached is treated as a binding civil-court decree and is not appealable.

Section 498A / BNS 85-86

The offence of cruelty to a woman by her husband or his relatives — IPC Section 498A is now BNS Sections 85-86.

Stamp Duty

A state tax payable on certain documents (sale deeds, agreements, leases). Paying it and registering gives the document legal validity and evidentiary value.

Encumbrance Certificate

A certificate from the Sub-Registrar showing a property is free of monetary/legal liabilities (like mortgages) over a period — key before buying.

Mutation

Updating the land/revenue records to record a new owner after a sale, inheritance or gift, so property tax is billed to the right person.

Consumer Protection Act / e-Daakhil

Under the Consumer Protection Act 2019 you can complain about a defective product or deficient service to a Consumer Commission, and file online for free via the e-Daakhil portal.

Trademark (™ / ®)

Protection for a brand name, logo or slogan. ™ may be used once filed; ® only after registration. A registered trademark lasts 10 years and is renewable.

Anticipatory Bail (BNSS 482)

A pre-arrest bail you can seek when you fear arrest in a non-bailable case, now under Section 482 of the BNSS 2023 (earlier Section 438 CrPC).

Cognizable vs Non-cognizable Offence

For a cognizable offence the police can register an FIR and arrest without a warrant; for a non-cognizable offence they generally need the magistrate's permission.

Corporate

DIN

Director Identification Number — a unique number every company director must hold, issued by the MCA. Directors complete annual KYC via DIR-3 KYC.

CIN

Corporate Identity Number — a 21-character code identifying a company registered with the Registrar of Companies (ROC).

MOA / AOA

Memorandum of Association (the company's objects and scope) and Articles of Association (its internal rules) — core incorporation documents.

SPICe+

The integrated MCA web form for incorporating a company, bundling name reservation, incorporation, PAN, TAN, GST, EPFO/ESIC and bank account.

AOC-4 / MGT-7

Annual ROC filings — AOC-4 files the financial statements (within 30 days of the AGM) and MGT-7/7A files the annual return (within 60 days of the AGM).

LLP

Limited Liability Partnership — a body corporate combining a partnership's flexibility with limited liability, formed via Form FiLLiP and governed by the LLP Act 2008.

DSC

Digital Signature Certificate — an electronic signature required to file company, GST and income-tax forms online.

Udyam Registration

Free online MSME registration on the Udyam portal, classifying a business as micro, small or medium by investment and turnover for various benefits.

TAN

Tax Deduction and Collection Account Number — a 10-character ID a deductor needs to deduct or collect TDS/TCS and file TDS returns.

AGM

Annual General Meeting — the yearly meeting of a company's shareholders to adopt accounts, declare dividends and appoint auditors/directors.

Authorised vs Paid-up Capital

Authorised capital is the maximum share capital a company may issue (per its MOA); paid-up capital is what shareholders have actually paid in.

OPC (One Person Company)

A private company with a single member, giving a solo entrepreneur limited liability and a separate legal identity.

Section 8 Company

A company formed for charitable or not-for-profit objects (education, charity, etc.), which cannot pay dividends and must apply profits to its objects.

INC-20A

The declaration of commencement of business a company must file (generally within 180 days of incorporation) before it can start operations or borrow.

Statutory Audit

The mandatory annual audit of a company's financial statements by an independent Chartered Accountant, required under the Companies Act.

Professional Tax

A state-level tax on income from a profession, trade or employment, capped at ₹2,500 per year. It does not apply in every state.

IEC (Import Export Code)

A code issued by the DGFT that a business needs to import into or export out of India. It is PAN-based and generally valid for the life of the entity.

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Definitions are simplified for general understanding and are not legal or tax advice. Rules change with each Finance Act / notification — verify with a licensed professional. India Law Simplified is an AI-assisted tool.