India Accounting & Tax Glossary

Advance Tax requires businesses and individuals with tax liability above INR 10,000 in a financial year to pay tax in four instalments during the year — not in a lump sum at filing. The instalment due dates are 15 June (15%), 15 September (45%), 15 December (75%), and 15 March (100% of assessed tax for the year). Failure to pay results in interest under Sections 234B and 234C.

India levies Corporate Income Tax on the net profits of companies registered under the Companies Act 2013. The headline rate for domestic companies is 30%, but the effective rate for most companies is 22% under the concessional Section 115BAA regime (plus 10% surcharge and 4% cess = ~25.17%). New manufacturing companies incorporated after 1 October 2019 and commencing production before 31 March 2024 can opt for 15% under Section 115BAB (plus surcharge and cess = ~17.01%).

Depreciation under the Income Tax Act 1961 (Section 32) reduces taxable profit for wear and tear on business assets. Unlike Companies Act depreciation (useful life-based), Income Tax Act depreciation uses written-down value (WDV) block-of-assets method with prescribed rates — 15% for most plant and machinery, 40% for computers/software, 10% for buildings, 60% for certain energy-saving equipment. A new asset used for less than 180 days in the year gets 50% of the applicable rate.

GST is India's unified indirect tax that replaced VAT, service tax, central excise and several other levies from 1 July 2017. It is a dual structure: Central GST (CGST) and State GST (SGST) apply to intra-state supplies; Integrated GST (IGST) applies to inter-state supplies and imports. The standard rate is 18%, with a luxury/demerit rate of 28%, and reduced rates of 12% and 5%. Basic food essentials attract 0%.

Professional Tax is a state-level tax on professions, trades, and employment levied by most Indian states and Union Territories (exceptions: Arunachal Pradesh, Delhi, Goa, Rajasthan, Uttarakhand, Jammu and Kashmir). It is deducted by employers from employee salaries and remitted to the state government. The maximum rate under the Constitution is INR 2,500 per year per employee. Rates vary by state and income slab.

Chapter VI-A of the Income Tax Act 1961 (Sections 80C to 80U) provides deductions from gross total income for companies and individuals. For companies, the most relevant deductions are Section 80G (donations to approved funds/institutions — 50% to 100%), Section 80IC/80IE (profits from businesses in specified areas — North East India, Himachal Pradesh), Section 80JJAA (additional deduction for new employee costs, 30% of additional wages for 3 years), and Section 80-IAC (Startup India — 3 years tax holiday for eligible startups). Companies opting for Section 115BAA (22% rate) cannot claim most Section 80 deductions except 80JJAA and 80G.

TDS is a mechanism under the Income Tax Act 1961 where the payer deducts tax at the time of making certain payments (salary, rent, professional fees, interest, contractor payments) and deposits it with the government on behalf of the payee. The deductor must have a TAN (Tax Deduction and Collection Account Number). TDS rates range from 1% to 30% depending on the payment type.

The Annual General Meeting is a mandatory meeting of shareholders of a company under Section 96 of the Companies Act 2013. Private Limited companies must hold their AGM within 6 months of the end of the financial year (by 30 September for 31 March year-end companies). At the AGM, shareholders approve accounts, declare dividends, appoint/reappoint auditors, and elect directors.

ITR-6 is the Income Tax Return form applicable to all companies registered under the Companies Act 2013 (and foreign companies) that do not claim exemption under Section 11 (religious/charitable trusts). It must be filed electronically by 31 October of the assessment year (30 November if the company has international/specified domestic transactions subject to transfer pricing audit). The return must be verified using Digital Signature Certificate (DSC) of a director.

The Employees' Provident Fund (EPF) is a mandatory retirement savings scheme under the Employees' Provident Funds and Miscellaneous Provisions Act 1952, administered by the Employees' Provident Fund Organisation (EPFO). Applicable to companies with 20 or more employees. Both employer and employee contribute 12% of basic salary + dearness allowance. The employer's 12% is split: 8.33% to Employee Pension Scheme (EPS, capped at INR 1,250/month on INR 15,000 ceiling) and 3.67% to EPF.

ROC compliance refers to the annual and event-based filings required under the Companies Act 2013 with the Ministry of Corporate Affairs (MCA) via the MCA21 portal. Key annual filings include Form MGT-7 (Annual Return, within 60 days of AGM), Form AOC-4 (Financial Statements, within 30 days of AGM), and Form ADT-1 (Auditor Appointment). Non-compliance attracts additional fees and can lead to strike-off of the company.

PAN (Permanent Account Number) is a 10-digit alphanumeric identifier issued by the Income Tax Department to all persons liable to pay tax in India — individuals, companies, and other entities. Every company must have a PAN and quote it on all tax returns, correspondence, and financial transactions above INR 50,000. TAN (Tax Deduction and Collection Account Number) is a separate 10-digit identifier required by any entity that deducts or collects tax at source (TDS/TCS). Both are issued by NSDL/UTIITSL.