CA Inter Paper 4 key terms

The period of twelve months starting 1 April that immediately follows the previous year, during which the income earned in that previous year is charged to tax under the Income-tax Act.

The financial year in which income is actually earned or received by the assessee, being the year immediately preceding the assessment year in which that income is taxed.

The classification of a person as resident or non-resident, and further as ordinarily or not ordinarily resident, based on days of stay in India and other tests, which decides the scope of taxable income.

The sum of income computed under all five heads after applying the permissible set-offs of losses and before allowing deductions under the relevant deduction chapter of the Income-tax Act.

The aggregate of the income computed under the five heads of income after setting off intra-head and inter-head losses, but before claiming any deductions under Chapter VI-A.

Specified amounts allowed from gross total income for payments such as life insurance premia, pension contributions, medical insurance and donations, subject to the limits and conditions stated for each section.

The threshold amount of total income up to which no income-tax is payable by an individual, which varies with the applicable tax regime and with the assessee's age in the old regime.

A deduction from the amount of income-tax itself, rather than from income, granted to resident individuals whose total income does not exceed the prescribed limit, subject to the conditions of the relevant section.

An additional charge levied on the amount of income-tax payable, at rates that rise with the level of total income, and which is subject to marginal relief where income only slightly exceeds a threshold.

A levy computed as a fixed percentage of the aggregate of income-tax and surcharge, added to the tax liability and payable along with it by every assessee.

Tax paid by the assessee in instalments during the previous year itself, based on estimated income, whenever the estimated tax liability exceeds the prescribed threshold amount.

A mechanism by which a person responsible for paying specified income must deduct tax at the prescribed rate and remit it to the government, giving credit to the deductee.

The consolidated annual statement issued by the income-tax department showing tax deducted at source, tax collected at source, advance tax and other credits recorded against the assessee's Permanent Account Number.

The prescribed form through which an assessee furnishes details of income, deductions, taxes paid and other particulars to the income-tax department for a given assessment year.

A return of income filed after the due date prescribed under the law but within the extended time limit allowed, attracting late-filing fees and possible loss of certain reliefs.

A return filed to correct an omission or a wrong statement in an earlier return, which replaces the original return if filed within the time allowed by the Act.

Property of any kind held by an assessee, whether or not connected with business, excluding items such as stock-in-trade, personal effects, agricultural land and specified gold or bonds.

The profit arising on the transfer of a capital asset, computed by deducting the cost of acquisition, improvement and transfer expenses from the net sale consideration, and classified as short-term or long-term.

The cost of acquisition adjusted by the cost inflation index of the year of transfer divided by the index of the year of acquisition, used to compute long-term capital gains under the old regime.

The amount actually paid by the assessee to acquire a capital asset, or the fair market value or other deemed amount where the asset was acquired by gift, inheritance or similar means.

A simplified scheme under which income of certain small businesses and professionals is deemed to be a fixed percentage of turnover or gross receipts, relieving them from detailed book-keeping.

The adjustment of a loss from one source or head against income from another source or head in the same year, subject to the restrictions placed by the Act.

The right to carry an unabsorbed loss to subsequent assessment years and set it off against future income, available only where the return was filed within the prescribed time.

The rules requiring that international transactions and specified domestic transactions between associated enterprises be priced at arm's length, with documentation and audit obligations where thresholds are crossed.

An enterprise that participates directly or indirectly in the management, control or capital of another enterprise, or in which the same persons participate, as defined for transfer pricing purposes.

The price charged or paid in a transaction between unrelated parties in comparable circumstances, which is the benchmark against which related-party transaction prices are tested.

Under GST, the broad taxable event covering all forms of supply of goods or services such as sale, transfer, barter, exchange, licence, rental, lease and disposal, made for consideration in the course or furtherance of business.

In relation to the supply of goods or services, any payment made or to be made, whether in money or otherwise, by the recipient or a third person, including the monetary value of acts or forbearance.

A supply made by a taxable person to a recipient consisting of two or more taxable supplies naturally bundled and supplied in conjunction, one of which is a principal supply that determines the tax treatment.

Two or more individual supplies of goods or services made together for a single price, which are not naturally bundled, so the combination is treated as a supply of the item attracting the highest rate of tax.

The supply of goods or services that constitutes the predominant element of a composite supply and to which any other supply forming part of it is ancillary.

The transaction value, being the price actually paid or payable for the supply where the supplier and recipient are unrelated and price is the sole consideration, subject to inclusion and exclusion rules.

The credit of GST paid on inward supplies of goods or services used in the course or furtherance of business, which is set off against the tax payable on outward supplies.

A ledger maintained on the GST portal in which input tax credit is credited and from which it can be used only for payment of output tax, with no cash withdrawal permitted.

The ledger on the GST portal recording the total amount of tax, interest, penalty, fee and other amounts payable by a registered person, against which payments are discharged.

A mechanism under which the liability to pay GST on a notified supply shifts from the supplier to the recipient, who discharges it in cash without using input tax credit in the usual way.

An optional scheme allowing small taxpayers to pay tax at a flat rate on turnover instead of the normal rates, with restrictions on claiming input tax credit and on making inter-state outward supplies.

The total value of all taxable supplies, exempt supplies, exports and inter-state supplies of a person having the same Permanent Account Number, computed on an all-India basis, excluding inward supplies on which reverse charge applies.

The aggregate turnover limit above which a person becomes liable to be registered under GST, which differs for goods and services and for special category states.

The statutory location determined for a transaction that decides whether a supply is intra-state or inter-state, and therefore which tax, central or state, is levied.