Tax Terms, Explained Simply
A plain-English A–Z dictionary of Indian income tax jargon — written by CAs so you actually understand your finances.
20+
Tax Terms
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Categories
CA
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Advance Tax
Tax paid in installments throughout the year (not at year-end) when your estimated tax liability exceeds ₹10,000. Avoids interest under Sections 234B and 234C.
Annual Information Statement
A comprehensive statement showing all financial transactions reported against your PAN — from salary and interest to stock trades and property purchases.
Assessment Year
The 12-month period (April 1 to March 31) in which income earned in the previous year is assessed and taxes are paid.
ITR Form 1 (Sahaj)
The simplest income tax return form for salaried individuals with income up to ₹50 lakh from salary, one house property, and interest income.
ITR Form 2
The income tax return form for individuals and HUFs with capital gains, multiple house properties, or foreign income — but no business or professional income.
ITR Form 3
The income tax return form for individuals and HUFs with income from business or profession, including partners in a firm — the most detailed individual ITR form.
ITR Form 4 (Sugam)
The simplified return form for individuals, HUFs, and firms opting for presumptive taxation under Sections 44AD, 44ADA, or 44AE.
Section 80C
A deduction provision allowing individuals and HUFs to claim up to ₹1.5 lakh per year by investing in specified instruments like PPF, ELSS, LIC, and home loan principal.
Section 80D
A deduction for health insurance premiums and preventive health check-ups paid for self, family, and parents — available under the Old Tax Regime.
Self-Assessment Tax
The balance tax you pay yourself before filing your ITR — equal to your total tax liability minus TDS deducted and advance tax already paid.
Short-Term Capital Gains
Profit from selling a capital asset held for less than the qualifying long-term period — taxed at higher rates than long-term gains.
Standard Deduction
A flat deduction of ₹75,000 from salary/pension income available to all salaried individuals and pensioners — no receipts or proof required.
Tax Collected at Source
Tax collected by the seller from the buyer at the time of sale of specific goods or services — deposited with the government on the buyer's behalf.
Tax Deducted at Source
Tax deducted by the payer at the time of making payment — on salary, interest, rent, professional fees, and more — before the recipient receives the amount.
Understanding Tax Terms Is the First Step
Now let a qualified CA apply them to your actual return.