Indian Income Tax Glossary

AIS — Annual Information Statement

Also called: Annual Information Statement, AIS form

The Income Tax Department's consolidated view of every financial transaction reported against your PAN — salary, interest, dividend, mutual-fund redemptions, property purchases, share trades, foreign remittances. Download from the IT portal under Services → AIS. RefundWise cross-checks your Form 16 against AIS / TIS so nothing material is missed.

Assessment Year (AY)

Also called: AY, AY 2026-27

The year in which income earned during the previous financial year is assessed and tax is filed. AY 2026-27 corresponds to FY 2025-26 (income earned between 1 April 2025 and 31 March 2026). Your ITR for AY 2026-27 is filed by 31 July 2026 (no audit cases).

Belated Return

An ITR filed after the original due date (31 July for non-audit cases). For AY 2026-27 the belated-return window closes on 31 December 2026, with a ₹1,000 late fee under Section 234F if total income is up to ₹5 lakh, or ₹5,000 above that. You cannot carry forward losses (except house-property loss) in a belated return.

Capital Gains (LTCG / STCG)

Also called: LTCG, STCG, Long Term Capital Gains, Short Term Capital Gains

Profit on sale of capital assets. Equity-oriented holdings (listed shares, equity mutual funds) become long-term after 12 months — taxed at 12.5% beyond a ₹1.25 lakh annual exemption. Held under 12 months they are short-term, taxed at 20%. Debt mutual funds bought on or after 1 April 2023 are slab-rate taxed regardless of holding period. Real estate / unlisted shares have separate long-term thresholds and indexation rules.

Cess — Health & Education

Also called: Health and Education Cess, 4% cess

A flat 4% surcharge applied on tax (after rebate and surcharge) to fund central-government health and education schemes. It applies in BOTH Old and New regimes. RefundWise computes cess automatically on the final tax figure.

DTAA — Double Taxation Avoidance Agreement

A treaty between India and another country that prevents the same income being taxed in both. NRIs and resident Indians with foreign income use DTAA either via the "exemption" or "tax credit" method. Form 67 must be filed before the ITR to claim foreign-tax credit.

EPF — Employees' Provident Fund

A mandatory retirement-savings scheme for salaried employees. Employee contribution (12% of basic + DA) qualifies for Section 80C deduction. Withdrawal is fully tax-exempt after 5 years of continuous service; earlier withdrawals attract 10% TDS and become taxable.

EVC — Electronic Verification Code

A 10-digit alphanumeric code used to e-verify your ITR without a digital signature. Generated via net banking, Aadhaar OTP, demat account, bank account, or ATM. ITR e-verification is mandatory within 30 days of filing — otherwise the return is treated as not filed.

Financial Year (FY)

Also called: FY, FY 2025-26

The 12-month period from 1 April to 31 March in which income is earned. FY 2025-26 = income earned 1 April 2025 to 31 March 2026. Your ITR for this income is filed in AY 2026-27.

Form 16

Also called: Form 16 download, Form 16 Part A, Form 16 Part B

The TDS certificate issued by your employer under Section 203, summarising salary paid and TDS deducted during a financial year. Part A is downloaded from TRACES (TDS amount, employer TAN, your PAN). Part B is prepared by the employer (gross salary, allowances, Chapter VI-A deductions claimed, taxable income). Employers must issue Form 16 by 15 June following the financial year.

Form 16A

TDS certificate for income OTHER than salary — interest on FDs, rent, professional fees, etc. Issued by the deductor (bank, tenant, client) and visible in your Form 26AS / AIS. Use it to claim credit for TDS deducted on non-salary income when filing your ITR.

Form 26AS

A consolidated annual tax statement showing every tax deposit against your PAN — TDS by employer/bank/tenant, advance tax, self-assessment tax, refunds received, high-value transactions. Download from the IT portal under My Account → View Form 26AS. Cross-check against Form 16 / 16A to ensure TDS credit is correctly claimed.

HRA — House Rent Allowance

Also called: House Rent Allowance, Section 10(13A), HRA exemption

Salaried employees living in rented accommodation can claim an HRA exemption under Section 10(13A). Exempt amount = minimum of (actual HRA received, rent paid − 10% of basic salary, 50% of basic for metro / 40% non-metro). Landlord PAN is required when annual rent exceeds ₹1 lakh. HRA is OLD regime only.

ITR — Income Tax Return

Also called: Income Tax Return, ITR form

The form you file annually to declare income and pay/claim refund of tax for a financial year. There are 7 ITR forms (ITR-1 through ITR-7); salaried filers use ITR-1, ITR-2, ITR-3, or ITR-4 based on income type and quantum.

ITR-1 (Sahaj)

For resident individuals with total income up to ₹50 lakh, sourced ONLY from: salary/pension, one house property (not carried-forward loss), other sources (interest, dividend, family pension up to limits), and agricultural income up to ₹5,000. Not available if you have capital gains, more than one house property, foreign income, business/professional income, or are a director in a company.

ITR-2

For individuals and HUFs whose income includes capital gains, multiple house properties, foreign income/assets, agricultural income above ₹5,000, or who are directors/RNORs. Does NOT include income from business or profession.

ITR-3

For individuals and HUFs having income from business or profession (other than presumptive). Used by freelancers and consultants who haven't opted for the 44ADA presumptive scheme, traders, partners in firms, etc.

ITR-4 (Sugam)

For resident individuals, HUFs, and firms (other than LLPs) with total income up to ₹50 lakh and income from business/profession computed under presumptive sections 44AD (small business), 44ADA (professionals — gross receipts up to ₹75 lakh), or 44AE (transport business).

ITR Verification (e-Verify)

The final step after submitting ITR — must be completed within 30 days or the return is treated as not filed. Options: Aadhaar OTP (fastest), net banking, demat account, bank-account EVC, ATM, or signed ITR-V posted to CPC Bengaluru.

Marginal Relief

A legal safeguard ensuring a small increase in income beyond a tax threshold (Section 87A rebate cap or surcharge cliffs at ₹50L, ₹1Cr, ₹2Cr, ₹5Cr) does not cause a disproportionate increase in tax. Example: at ₹12,00,001 New regime taxable income, raw tax would jump from ₹0 to ₹60,150 — marginal relief caps it to ₹1 (the excess above ₹12L). RefundWise applies marginal relief automatically at every cliff.

New Tax Regime

The default tax regime from FY 2023-24 onwards. For FY 2025-26: slabs of 0/5/10/15/20/25/30% across 0-4L, 4-8L, 8-12L, 12-16L, 16-20L, 20-24L, above 24L. Standard deduction ₹75,000. 87A rebate up to ₹60,000 for taxable income up to ₹12L. Disallows most Chapter VI-A deductions except 80CCD(2) employer NPS.

NPS — 80CCD(1), 80CCD(1B), 80CCD(2)

Also called: NPS, 80CCD(1B), 80CCD(2), Section 80CCD

National Pension System deductions. 80CCD(1) — employee contribution up to 10% of salary, capped within the overall ₹1.5L Section 80C limit (OLD regime). 80CCD(1B) — additional ₹50,000 above the 80C cap (OLD regime only). 80CCD(2) — employer contribution up to 10% of basic salary (14% for government employees) — allowed in BOTH Old and New regimes.

Old Tax Regime

The traditional regime allowing the full set of Chapter VI-A deductions (80C, 80D, 80E, 80G, etc.), HRA exemption, Section 24(b) home-loan interest, and professional tax. Slabs of 0/5/20/30%. Standard deduction ₹50,000. 87A rebate up to ₹12,500 for taxable income up to ₹5L. Worth choosing when total deductions exceed roughly ₹4-5 lakh.

PAN — Permanent Account Number

A unique 10-character alphanumeric identifier (e.g. ABCDE1234F) issued by the IT Department to every Indian taxpayer. The first 5 characters are letters, next 4 are digits, last is a letter. Mandatory for filing ITR, opening bank accounts, transactions above ₹50,000, and almost every financial transaction in India.

Perquisite

Non-cash benefits provided by an employer that form part of taxable salary — rent-free accommodation, company car, ESOPs, club memberships, interest-free loans, employer-paid insurance. Each perquisite has a specific valuation rule under Rule 3 of the Income Tax Rules. Reported in Form 16 Part B under "Perquisites".

Professional Tax

A state-government tax on income from profession, trade, or employment — usually ₹200/month, capped at ₹2,500/year. Deductible under Section 16(iii) but ONLY in the Old regime. Pre-filled from Form 16 in RefundWise.

Rebate Section 87A

Also called: 87A rebate

A direct tax rebate for resident individuals with low/moderate income. Old regime: up to ₹12,500 for taxable income up to ₹5,00,000 (effectively zero tax up to that level). New regime FY 2025-26: up to ₹60,000 for taxable income up to ₹12,00,000 (zero tax up to ₹12,75,000 gross salary with standard deduction). Marginal relief kicks in past the cliff.

Section 80C

Also called: 80C deduction

The most-used deduction. Combined cap of ₹1,50,000 across 80C + 80CCC + 80CCD(1). Eligible investments: EPF, PPF, ELSS, LIC premiums, NSC, principal on home loan, children's tuition fees, NPS Tier-I (under 80CCD(1)), 5-year tax-saver FDs, ULIP. Old regime only.

Section 80D

Medical insurance premium and preventive health check-up deduction. Self + family ₹25,000 (₹50,000 if you or insured is 60+). Add ₹50,000 for senior parents. Maximum combined cap is ₹1,00,000 if both filer and parents are senior citizens. Preventive check-up included within the cap up to ₹5,000.

Section 80E

Interest on education loans taken for higher education of self, spouse, or children. No cap on the amount. Deduction available for 8 consecutive years from the year repayment begins, or until the loan is fully repaid — whichever is earlier. Only interest is deductible; principal is not. Old regime only.

Section 80G

Donations to specified charitable institutions. Either 50% or 100% of the donation is deductible, with or without qualifying limits depending on the donee category. Cash donations above ₹2,000 are not eligible — pay by cheque/UPI/online. Donor must obtain a Form 10BE receipt from the institution.

Section 80TTA / 80TTB

Also called: 80TTA, 80TTB

80TTA — interest on SAVINGS-bank accounts, deduction up to ₹10,000, available to individuals under 60. 80TTB — interest on savings + fixed + recurring deposits, deduction up to ₹50,000, available ONLY to senior citizens (60+). The two are mutually exclusive — claim whichever applies based on age. Old regime only.

Sections 80U, 80DD, 80DDB

80U — fixed deduction for filer's OWN disability (₹75,000 for 40-80%, ₹1.25 lakh for severe 80%+). 80DD — for medical treatment of a DEPENDENT with disability (same caps as 80U). 80DDB — for treatment of specified diseases (cancer, neurological, AIDS, etc.) for self or dependent — ₹40,000 (regular) / ₹1 lakh (senior). All Old regime only.

Section 24(b) — Home Loan Interest

Interest paid on home loan for a self-occupied property — deduction up to ₹2,00,000 per year. For a let-out property, the entire interest is deductible against rental income (but overall house-property loss set-off is capped at ₹2 lakh). Old regime only. Section 80EE / 80EEA give additional caps for first-time buyers and affordable housing.

Self-Assessment Tax

Tax you owe after subtracting TDS already deducted and advance tax already paid. Calculated yourself when filing ITR; paid via Challan 280 before submitting the return. Without it, the ITR cannot be e-verified successfully.

Standard Deduction

A flat deduction available to salaried and pensioners without proof of expenses. ₹75,000 in the New regime (FY 2024-25 onwards), ₹50,000 in the Old regime.

Surcharge

An additional tax on tax for high earners. Triggered at total income above ₹50L (10%), ₹1Cr (15%), ₹2Cr (25% Old / 25% New capped), ₹5Cr (37% Old / 25% New capped). Marginal relief applies at every cliff. Cess of 4% is then computed on tax + surcharge.

TAN — Tax Deduction Account Number

A 10-character alphanumeric ID issued to entities that deduct TDS (employers, banks, tenants). Appears on Form 16 Part A as your employer's TAN. Different from PAN — TAN is for TDS deductors; PAN is for individual taxpayers.

TDS — Tax Deducted at Source

Tax withheld by a payer (employer, bank, tenant, client) and deposited with the IT Department on the payee's behalf. Reflected in Form 16 (salary), Form 16A (other), and aggregated in Form 26AS. When you file ITR, total TDS is set off against your final tax liability — excess becomes refund.

TIS — Taxpayer Information Summary

A processed, deduplicated summary of your AIS (Annual Information Statement). TIS shows the IT Department's "value" for each income category after their internal processing. RefundWise can ingest TIS to cross-reconcile against Form 16 and surface unreported interest, dividend, capital gains, or TDS your employer didn't see.