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Tax Glossary A-Z

A

Allowance
An amount that reduces taxable income, such as House Rent Allowance (HRA) or Leave Travel Allowance (LTA).
Assessment
The process of determining the tax liability of a taxpayer by the tax authorities.

B

Business Expense
Costs incurred in the course of business operations that are deductible from taxable income.
Basic Exemption
The minimum income level below which no tax is levied.

C

Capital Gain
Profit earned from the sale of capital assets like property or stocks.
Corporate Tax
Tax levied on the profits of companies or corporations.

D

Depreciation
The decrease in value of an asset over time, used for tax deductions.
Dividend
A distribution of a portion of a company's earnings to its shareholders.

E

Exemption
An amount that is not subject to tax due to specific provisions in tax laws.
Excise Duty
A tax levied on the production, sale, or consumption of goods within a country.

F

Filing Status
The category that defines a taxpayer's marital status and household situation for tax purposes.
Fiscal Year
A period used for calculating annual ("yearly") financial statements in businesses and other organizations.

G

Goods and Services Tax (GST)
An indirect tax levied on the supply of goods and services in India.
Gift Tax
A tax imposed on the transfer of ownership of property as a gift.

H

House Rent Allowance (HRA)
An allowance provided by employers to employees to meet rental expenses.
Income Tax
A tax imposed on individuals or entities based on their income or profits earned.

I

Input Tax Credit (ITC)
A mechanism under GST where tax paid on inputs can be used as a credit against GST liability.
Inheritance Tax
A tax imposed on the estate of a deceased person before it is distributed to heirs.

J

Joint Return
A tax return filed by married couples that combines their income and deductions.
Jurisdiction
The geographical area over which a government entity has authority and control.

K

K-Form
A form used to report income earned by an individual or entity.
Kiddie Tax
A tax imposed on the unearned income of children under a certain age.

L

Long-Term Capital Gain
Profit earned from the sale of assets held for more than one year.
Levy
The legal authority to impose a tax.

M

Minimum Alternate Tax (MAT)
A tax imposed on companies that show a profit but have paid little or no tax due to tax incentives or deductions.
Municipal Tax
Tax levied by local governments on properties or activities within their jurisdiction.

N

Net Income
The amount of income remaining after deductions, expenses, and taxes have been subtracted.
Non-Resident
A person or entity that is not considered a resident for tax purposes in a particular country.

O

Offshore
Activities, accounts, or investments conducted or located outside the country of residence for tax purposes.
Overdue Tax
Tax that remains unpaid after its due date.

P

Payroll Tax
A tax imposed on employers or employees based on wages and salaries paid.
Property Tax
A tax imposed on the value of property, usually real estate.

Q

Qualified Dividends
Dividends that qualify for a lower tax rate because they meet certain criteria.
Quarterly Estimated Tax
Estimated tax payments made by self-employed individuals and others who do not have taxes withheld.

R

Refund
Money returned to a taxpayer because they paid more tax than they owed.
Resident
A person or entity that is considered a resident for tax purposes in a particular country.

S

Standard Deduction
A fixed dollar amount that reduces taxable income, available to most taxpayers.
Self-Employment Tax
A tax on income from self-employment, including Social Security and Medicare taxes.

T

Tax Evasion
Illegal activities to avoid paying taxes.
Taxable Income
Income that is subject to tax after deductions, exemptions, and credits.

U

Unearned Income
Income from sources other than employment, such as investments or rental property.
Underpayment Penalty
A penalty imposed when a taxpayer has not paid enough tax throughout the year.

V

Value Added Tax (VAT)
A consumption tax on the value added to goods and services at each stage of production and distribution.
Voluntary Disclosure
Reporting undisclosed income or assets to tax authorities voluntarily.

W

Withholding Tax
Tax deducted from income payments before the recipient receives it.
Wealth Tax
A tax on the value of assets owned by individuals or entities.

X

eXemption
An amount excluded from taxable income, reducing the amount of tax owed.
X-Form
A form used for filing taxes in some jurisdictions.

Y

Year-End Tax Planning
Strategies used at the end of the fiscal year to minimize tax liability.
Yield
The income earned from an investment, usually expressed as a percentage.

Z

Zero-Rated
Goods or services that are taxed at a rate of 0%, effectively exempt from tax.
Zone
A designated area with specific tax benefits or regulations.