Tax & Finance Glossary
58 statutory terms and legal definitions under the CGST Rules and the Income-tax Act — explained in plain English.
A
7a Cross-Objection
A cross-objection is a memorandum filed by the respondent in a Tribunal appeal, raising grounds against parts of the order decided against them, within thirty days of receiving notice of the appeal.
a Remand
A remand is an appellate order sending a matter back to the lower authority for fresh consideration, usually because facts were not properly examined or natural justice was not observed.
Advance Ruling
An advance ruling is a written decision from the Authority for Advance Ruling (AAR) on a GST question, binding on the applicant and the jurisdictional officer.
Advance Tax
Advance tax is income tax paid in instalments during the financial year on estimated income, rather than in a lump sum at the end.
Annual Information Statement (AIS)
The Annual Information Statement (AIS) is a comprehensive statement of a taxpayer's financial transactions reported to the income-tax department.
Arm's Length Price
The arm's length price (ALP) is the price that would be charged in a comparable transaction between unrelated parties under similar conditions.
Associated Enterprise
An associated enterprise is an enterprise that participates, directly or indirectly, in the management, control or capital of another, bringing their transactions within transfer-pricing rules.
B
3BEPS
BEPS (Base Erosion and Profit Shifting) is the OECD/G20 project addressing tax-avoidance strategies that shift profits to low- or no-tax locations.
Block of Assets
A block of assets is a group of assets of the same class and depreciation rate, on which income-tax depreciation is computed collectively using the written-down value (WDV) method.
Blocked Credit (Section 17(5))
Blocked credit refers to input tax credit that Section 17(5) of the CGST Act specifically disallows, even when the purchase is used for business.
C
3Capital Gains
Capital gains are the profits arising from the transfer of a capital asset, taxed as short-term or long-term depending on the holding period.
Composition Scheme
The composition scheme is a simplified GST option for small taxpayers to pay tax at a flat rate on turnover, without claiming input tax credit.
Condonation of Delay
Condonation of delay is the appellate authority's power to admit an appeal filed after the limitation period, where it is satisfied there was sufficient cause for the delay.
D
2DRC-01 Notice
A DRC-01 is the formal show-cause notice issued under GST for a demand of tax not paid, short paid or wrongly availed, under Section 73 or 74.
DTAA
A Double Taxation Avoidance Agreement (DTAA) is a treaty between two countries that allocates taxing rights and provides relief from being taxed twice on the same income.
E
3E-Invoice
An e-invoice under GST is a B2B invoice reported to the Invoice Registration Portal (IRP), which validates it and returns a unique Invoice Reference Number (IRN) and QR code.
ECB (External Commercial Borrowing)
External Commercial Borrowing (ECB) is borrowing by an Indian entity from a recognised foreign lender, regulated by the RBI under FEMA.
Equalisation Levy
Equalisation levy is a tax on certain digital transactions with non-residents - 6% on online advertising and a 2% levy on e-commerce supply (the latter withdrawn from August 2024).
F
9Faceless Assessment
Faceless assessment is an electronic income-tax assessment under Section 144B conducted through the National Faceless Assessment Centre, without any physical interface.
FDI (Foreign Direct Investment)
Foreign Direct Investment (FDI) is investment by a non-resident into an Indian company's equity, under the FDI policy and FEMA regulations.
FEMA
FEMA, the Foreign Exchange Management Act 1999, is the law governing foreign exchange transactions, cross-border investment and remittances in India.
Form 15CA / 15CB
Forms 15CA and 15CB are the declaration and accountant's certificate required for most taxable foreign remittances to non-residents.
Form 26AS
Form 26AS is a consolidated tax-credit statement showing the TDS, TCS, advance tax and self-assessment tax credited against a taxpayer's PAN.
Form 35
Form 35 is the prescribed form for filing a first appeal to the Commissioner (Appeals) against an assessment or other appealable order under the Income-tax Act.
Form 36
Form 36 is the prescribed form for filing an appeal to the Income Tax Appellate Tribunal against an order of the Commissioner (Appeals).
Form 3CD
Form 3CD is the detailed statement of particulars that accompanies the tax-audit report under Section 44AB.
Form 3CEB
Form 3CEB is the accountant's report under Section 92E certifying the particulars of international and specified domestic transactions with associated enterprises.
G
3GSTR-2B
GSTR-2B is a static, auto-drafted statement that shows the input tax credit available to a recipient for a tax period.
GSTR-9
GSTR-9 is the annual GST return that consolidates a financial year's outward and inward supplies, ITC and tax into one return per GSTIN.
GSTR-9C
GSTR-9C is a self-certified reconciliation statement that links the GST annual return (GSTR-9) with the audited annual financial statements.
H
1I
3Indexation
Indexation is the adjustment of an asset's cost of acquisition for inflation using the Cost Inflation Index (CII), to compute long-term capital gains.
Input Tax Credit (ITC)
Input Tax Credit (ITC) is the credit a registered person can claim for the GST paid on business purchases, set off against the GST payable on sales.
Invoice Management System (IMS)
The Invoice Management System (IMS) is a GST portal facility that lets a recipient accept, reject or keep pending each supplier invoice before it flows into GSTR-2B.
L
1O
1P
5Permanent Establishment
A permanent establishment (PE) is a fixed place of business through which a foreign enterprise carries on business in another country, creating a taxable presence there.
Pillar Two
Pillar Two is the BEPS measure introducing a 15% global minimum tax on large multinational groups through the GloBE rules.
Place of Supply
Place of supply is the location that determines whether a GST transaction is intra-State (CGST + SGST) or inter-State (IGST).
Pre-Deposit
A pre-deposit is the proportion of disputed tax that must be paid before a GST appeal will be admitted, refundable with interest if the appeal succeeds.
Presumptive Taxation
Presumptive taxation lets eligible small businesses and professionals declare income at a fixed percentage of turnover without maintaining detailed books.
Q
1R
1S
8SAC Code
A SAC (Services Accounting Code) is the classification code used to identify services for GST rate and reporting purposes.
Scrutiny Assessment
A scrutiny assessment is a detailed examination of a taxpayer's return under Section 143(3), initiated by a notice under Section 143(2).
Section 270AA Immunity
Section 270AA immunity relieves an assessee from penalty under Section 270A and from prosecution, in exchange for paying the assessed tax and interest and not appealing the assessment order.
Section 80C
Section 80C is a deduction of up to Rs.1.5 lakh a year for specified investments and payments, available only under the old tax regime.
Self Assessment Tax
Self-assessment tax is the balance tax a taxpayer pays on their own, after TDS and advance tax, before filing the income-tax return.
Set Off of Losses
Set-off of losses is the adjustment of a loss under one head of income against income, first within the same head and then across heads, with the balance carried forward.
Show Cause Notice
A show-cause notice (SCN) is a formal notice asking a taxpayer to explain why a proposed tax demand, penalty or action should not be taken.
Stay of Demand
A stay of demand is an order restraining recovery of a disputed tax demand while an appeal is pending, typically granted against payment of a proportion of the demand.
T
5Tax Audit
A tax audit is an audit of accounts required under Section 44AB when turnover or gross receipts exceed prescribed limits.
Taxpayer Information Summary (TIS)
The Taxpayer Information Summary (TIS) is a simplified, category-wise summary derived from the AIS, often used to pre-fill the income-tax return.
TCS
Tax Collected at Source (TCS) is tax collected by a seller from the buyer on specified sales and remittances, under Section 206C.
TDS
Tax Deducted at Source (TDS) is income tax withheld by the payer at the time of making specified payments, and deposited with the government on the payee's behalf.
Transfer Pricing
Transfer pricing is the set of rules requiring that transactions between associated enterprises be priced at arm's length, as if between unrelated parties.