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Basic Income-tax glossary
  • Advance Ruling :

    ​The Advance Ruling is a mechanism that helps in bringing certainty in the determination of tax liability on a particular transaction.​

  • Advance tax :

    ​The scheme of advance tax requires every assessee to estimate his current income, and if tax liability on such estimated income exceeds the specified limit, the assessee is required to pay the estimated tax in instalments during the financial year itself​

  • Agriculture Income :

    ​Agricultural income refers to income earned by a person from agricultural land situated in India.​

  • Alternate Minimum Tax (AMT) :

    ​Alternate Minimum Tax is the tax levied on income of non-companies at a prescribed rate in case the tax payable by them on normal income is less than AMT on adjusted total income.​

  • Alternate Minimum Tax (AMT) Credit :

    ​The tax paid by way of alternative minimum tax in excess of the amount of tax as per general provision is deemed as AMT Credit.​

  • Annual Information System :

    ​Annual Information Statement (AIS) is a statement that provides complete information about a taxpayer for a particular financial year. It contains information about taxpayers' incomes, financial transactions, tax details, income-tax proceedings, etc.​

  • Appeal :

    ​Appeal is a process by which a person (assessee or revenue) aggrieved by an order passed by the tax authority or judicial authority, as the case may be, can challenge it before the higher judicial authorities.​

  • Arm's Length Price :

    ​Arm's length price means a price which is applied or proposed to be applied in a transaction between persons other than associated enterprises, in uncontrolled conditions.​

  • Assessee :

    ​​Assessee means a person liable for payment of taxes or any other sum of money under the Income-tax Act. It also includes the person for whom any proceeding has been initiated under the Income-tax Act. The term 'assessee' also includes 'deemed assessee' and 'assessee-in-default'.

  • Assessee-in-default :

    ​​The term assessee-in-default refers to a person who fails to discharge his obligations prescribed under the Income-tax Act such as failure to furnish return of income, failure in payment or deposit of tax, etc.

  • Assessing Officer :

    ​"Assessing Officer" means the Assistant Commissioner or Deputy Commissioner or Assistant Director or Deputy Director or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under section 120(1)/(2) or any other provision of the Income-tax Act.

    AO also includes the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director who is directed under section 120(4)(b) to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under the Income-tax Act.​

  • Assessment :

    ​The process of examining the return of income by the Income-tax department is called assessment.​

  • Assessment Year :

    ​Assessment Year means the period of twelve months commencing on the 1st day of April every year.​

  • Belated Return :

    ​A return of income is filed after the expiry of due date is called belated return of income​

  • Best Judgement assessment :

    ​Best Judgment Assessment means estimation of taxable income of an assessee by the Assessing Officer based on available information and resources. This assessment takes place if assessee does not cooperate in assessment proceedings or if correct profit cannot be calculated based on books of accounts maintained by the assessee.​

  • Board :

    ​Board means the Central Board of Direct Taxes (CBDT) constituted under the Central Boards of Revenue Act, 1963.​

  • Books of Accounts :

    "books or books of account" includes ledgers, day-books, cash books, account-books and other books, whether kept in the written form or in electronic form or in digital form or as print-outs of data stored in such electronic form or in digital form or in a floppy, disc, tape or any other form of electro-magnetic data storage device.​​

  • Capital Asset :

    The term 'capital asset' means:

    a) Property of any kind, held by an assessee, whether or not connected with his business or profession;

    b) Any securities held by a FII which has invested in such securities in accordance with the SEBI Regulations;

    c) Any unit linked insurance policy to which exemption under Section 10(10D) does not apply on account of applicability of the fourth and fifth proviso [High premium equity oriented ULIPs]

  • Carry forward of losses :

    ​Carry forward of losses means carrying forward losses from current financial to next financial year in order to offset losses from future profits.​

  • Compounding of Offences :

    ​Compounding of an offence is a mechanism whereby the defaulter is reprieved of major legal consequences by affording him with an opportunity to pay a sum of money to escape prosecution.​

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