GST Terminology
GST Key Terms
| Term | Definition |
|---|---|
| CGST | Central Goods and Services Tax, levied by the Central Government on intra-state supply of goods and services. |
| SGST | State Goods and Services Tax, levied by the State Government on intra-state supply of goods and services. |
| IGST | Integrated Goods and Services Tax, levied on inter-state supply of goods/services and imports. Divided between Centre and destination state. |
| ITC | Input Tax Credit, credit of GST paid on purchases/inputs that can be set off against GST liability on sales/output. |
| HSN Code | Harmonized System of Nomenclature, 4/6/8 digit code classifying goods for GST rate determination. Mandatory on invoices above threshold. |
| SAC Code | Services Accounting Code, 6-digit code classifying services for GST purposes under the HSN framework. |
| E-Way Bill | Electronic Way Bill, mandatory document for movement of goods valued above ₹50,000 generated on the GSTN portal. |
| RCM | Reverse Charge Mechanism, where the recipient (not supplier) is liable to pay GST. Applies to specified categories of supplies. |
| GSTR-2B | Auto-generated monthly ITC statement showing supplier-filed invoices available for the recipient to claim as input tax credit. |
| Composition Scheme | Simplified GST compliance for small businesses with turnover below ₹1.5 crore. Pay flat rate; cannot collect tax from customers or claim ITC. |
Tax Terminology
Direct Tax Key Terms
| Term | Definition |
|---|---|
| AY (Assessment Year) | The year in which income of the previous financial year is assessed and taxed. AY 2025-26 covers income earned in FY 2024-25. |
| TDS | Tax Deducted at Source, tax deducted by the payer before making payments above threshold and deposited with the government. |
| TCS | Tax Collected at Source, tax collected by the seller from the buyer at the time of sale of specified goods/services. |
| MAT | Minimum Alternate Tax, applicable when a company’s normal tax is less than 15% of book profits. Ensures companies with book profits pay minimum tax. |
| Advance Tax | Tax paid in instalments during the financial year by taxpayers with tax liability > ₹10,000. Due in June, September, December, and March. |
| ITR | Income Tax Return, form filed annually reporting income, deductions, and taxes paid. Different forms (ITR 1-7) for different taxpayer categories. |
| DTAA | Double Tax Avoidance Agreement, bilateral treaty between India and another country to prevent the same income from being taxed twice. |
| Section 80C | Deduction up to ₹1.5 lakh for specified investments/payments like PPF, ELSS, LIC premium, home loan principal. Available only under old tax regime. |
| Capital Gains | Profit from sale of a capital asset (property, shares, mutual funds). Classified as short-term or long-term based on holding period. |
| Scrutiny Assessment | Detailed examination of ITR by the Assessing Officer under Section 143(3). Initiated when the department selects returns for detailed scrutiny. |
Audit Terminology
Audit Key Terms
| Term | Definition |
|---|---|
| Audit Opinion | Formal expression by the auditor on whether financial statements present a true and fair view. Can be unmodified, qualified, adverse, or disclaimer. |
| Materiality | Threshold above which misstatements, individually or in aggregate, could influence users’ decisions. Used to plan and perform audit procedures. |
| Going Concern | Assumption that an entity will continue to operate for the foreseeable future. Auditors must evaluate and report if there is material uncertainty. |
| Internal Control | Processes and procedures designed by management to ensure reliability of financial reporting, operational efficiency, and regulatory compliance. |
| CARO | Companies Auditor’s Report Order, mandatory additional reporting by auditors on specific matters like loans, fixed assets, fraud, and CSR. |
| Emphasis of Matter | Paragraph in auditor’s report drawing attention to a matter that is properly disclosed in financials but is fundamental to users’ understanding. |
FEMA & RERA Terminology
FEMA & RERA Key Terms
| Term | Definition |
|---|---|
| FDI | Foreign Direct Investment, investment made by a non-resident entity into a resident Indian company through equity, CCPS, or CCDs. |
| ECB | External Commercial Borrowings, loans raised by Indian entities from recognised foreign lenders. Governed by RBI’s ECB Framework. |
| FC-GPR | Foreign Currency, Gross Provisional Return. Filed when shares are allotted to a foreign investor after FDI inflow. |
| NRE Account | Non-Resident External account, maintains foreign earnings in rupees. Freely repatriable; interest exempt from Indian tax. |
| NRO Account | Non-Resident Ordinary account, maintains Indian-sourced income. Repatriation limited to $1 million per year. Interest is taxable in India. |
| Promoter (RERA) | Person who constructs a real estate project for sale. Includes developers, builders, and housing boards. Subject to RERA registration obligations. |
| RERA Registration | Mandatory registration of real estate projects and agents with state RERA authority before advertising, selling, or accepting bookings. |
| IEC | Importer Exporter Code, 10-digit code issued by DGFT mandatory for all import/export transactions in India. |
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