CHSE Odisha Vocational Tax Assistance key terms

Any person whose income, loss, or tax liability is being assessed under the Income-tax Act, including individuals, firms, companies, and other entities treated as a unit of assessment.

The twelve-month period beginning 1 April in which income earned during the preceding financial year is assessed and taxed, for example 2024-25 for income of 2023-24.

The financial year, ending 31 March, in which the assessee actually earns the income that will be taxed in the immediately following assessment year.

The aggregate of income computed under all five heads after applying clubbing and set-off of losses, but before allowing Chapter VI-A deductions such as those for life insurance or pension contributions.

Gross total income reduced by eligible Chapter VI-A deductions and exemptions; this rounded figure is the base on which income-tax is calculated at the applicable slab or flat rates.

A status for individuals who satisfy the basic residency test and also meet the additional conditions on prior residence; worldwide income is taxable and foreign income is not protected by the resident-but-not-ordinarily-resident rules.

An individual who qualifies as resident but fails the additional conditions about residence in earlier years; generally taxed on Indian income plus foreign income only when it is derived from a business controlled in or profession set up in India.

A person who does not satisfy the basic residency conditions for a previous year; taxable only on income received or accrued in India, plus certain foreign income connected to an Indian business or property.

The statutory rules in Section 5 that decide which incomes are included in total income, depending on residential status and on where income is received, accrues, or arises.

Remuneration received by an employee from an employer for services rendered, including wages, allowances, perquisites, and profits in lieu of salary, taxed under the head Salaries.

A non-cash benefit or amenity provided by an employer to an employee, such as rent-free accommodation, a car, or interest-free loans, valued under prescribed rules and added to taxable salary.

A fixed periodic payment made by an employer to meet a specific expense or condition of service; some allowances are fully taxable, some partially exempt, and some fully exempt under Section 10.

An allowance paid to meet rental costs; the exempt portion is the least of the actual allowance, rent paid minus ten percent of salary, and fifty percent (metro) or forty percent (non-metro) of salary.

A flat deduction available to salaried taxpayers and pensioners from gross salary, capped at a prescribed amount, granted without requiring any proof of expenditure.

For house property, the amount for which the property might reasonably be let, subject to statutory adjustments; it forms the starting point for computing income from house property.

Local property taxes actually paid by the owner during the year, which are deducted from the annual value of a house property when computing its taxable income.

Interest paid on borrowed capital used to acquire, construct, repair, or renovate a house property; deductible from annual value, with a separate higher limit for self-occupied property.

A simplified scheme allowing eligible small businesses and professionals to declare income at a fixed statutory percentage of turnover, avoiding detailed books, audits, and expense records.

Profit earned from carrying on a trade, commerce, manufacture, or adventure in the nature of trade, computed by deducting allowable business expenses from business receipts.

Property of any kind held by an assessee, including securities and immovable property, but excluding stock-in-trade, personal effects, and certain specified assets under the Act.

Gain on transfer of a capital asset held beyond the prescribed holding period, taxed at special rates and eligible for indexation or other statutory benefits depending on asset type.

The amount paid by the assessee to acquire a capital asset, adjusted where permitted by indexation, and deducted from sale consideration to compute capital gain.

The residual head that captures income not taxable under salaries, house property, business, or capital gains, such as interest, dividends, winnings, and gifts received.

Statutory deductions from gross total income for specified investments, insurance premiums, pension contributions, medical insurance, and eligible donations, subject to caps and conditions.

Arranging financial affairs within the legal framework to reduce tax liability through permitted deductions, exemptions, and timing choices, without concealment or evasion.

Illegal reduction of tax liability by concealing income, inflating expenses, or misrepresenting facts, attracting penalties and prosecution under the Income-tax Act.

A rebate reduces tax payable for small incomes under a specified threshold; a surcharge is an additional charge on tax for higher incomes, with marginal relief in specified cases.

An additional levy calculated as a fixed percentage of the income-tax plus surcharge payable, used to fund health and education initiatives; it is not a deductible expense.

A mechanism requiring a payer to deduct tax at prescribed rates while making specified payments such as salary, interest, rent, or professional fees, and remit it to the government.

A document such as Form 16 or Form 16A issued by the deductor certifying the tax deducted, which the deductee uses to claim credit while filing the income-tax return.

Tax paid in instalments during the financial year on income other than salary, based on estimated annual liability, with interest charged for shortfall or delay in instalments.

The balance tax and interest a taxpayer pays after taking credit for TDS and advance tax, before filing the return, so that declared income is fully taxed.

A prescribed form through which a taxpayer discloses income, deductions, taxes paid, and bank details to the department for a given assessment year.

A ten-character alphanumeric Permanent Account Number issued by the income-tax department, mandatory for filing returns, high-value transactions, and linking with bank accounts.

A fifteen-character Goods and Services Tax Identification Number assigned to a registered person, containing the state code, PAN, entity number, and a check digit.

The turnover limit above which a person must register under GST; it differs for goods and services and for special category states, with optional registration below the limit.

Credit for GST paid on purchases and services used in business, which can be set off against GST payable on outward supplies, subject to conditions and blocking provisions.

A simplified GST scheme for small taxpayers who pay a fixed low percentage of turnover instead of charging tax on supplies, and who cannot claim input tax credit.