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Key Terms on Taxation

• Assessee :

A person by whom any tax or any other sum of money is payable.

• Income:

‘Periodical monetary return coming in regularly from definite sources like one’s business, land, work, investments etc.’

• Assessment year :

The period of 12 months commencing on the first day of Apii 1 every year.

• Income exempted from tax:

Incomes that do not form part of total income either fully or partially.

• SEZ:

A geographical region that has economic laws that are more liberal than a  ‘untrv’s typical economic laws.

• Software technology park:

Park set up in accordance with the Software  Technology Park Scheme notified by the Government of India in the Ministry of  Commerce and Industry.

• Substantial expansion:

Increase in the investment in the plant and machinery  by at least 50 per cent of the book value of plant and machinery (before taking  depreciation in any year), as on the first day of the previous year in which the substantial expansion is undertaken.

• Theme Park:

Parks, which the Board, may, by notification in the Official Gazette,  specify in accordance with the scheme framed and notified by the Central Government

• Salary:

Any amount received by an employee from an employer. NOTES Allowance: Any amount or sum allowed regularly.

• Perquisites:

Any casual emolument or benefit attached to an office or position in addition to salary or wages.

• Pension:

Regular payment received by an employee after his retirement, and which is taxed as salary.

• Let-out property:

Property that is given for rent / lease

• Standard rent of a property (SR):

The maximum rent which a person can legally recover from his tenant under the Rent Control Act.

• Business:

Any economic activity carried on for earning profits.

• Profession:

Any vocation or job requiring some thought, skill and special knowledge.

• Set-off:

Adjustment of certain losses against income under other sources in the same ssessment year.

• Capital Gain:

Any profit or gain arising from the sale/transfer of a capital asset.

• Gross total income:

The aggregate income from all the heads of income.

• Foreign Company:

A company that is registered outside India in any other foreign country.

• Domestic Company:

An Indian Company or any other company with respect to its income, liable to tax under the Income Tax Act, which has made the prescribed arrangements for the declaration and payment of the dividends payable out of such income within India.

• Regular Profit:

The profit computed by applying the provisions of tax laws.

• Book Profit:

The profit computed on the basis of Schedule VI of the Companies Act, 1956.

• Venture capital company:

A company that has been granted a certificate of  registration under the Securities and Exchange Board of India Act, 1992

• Venture capital fund:

A fund that operates under a trust deed registered under the provisions of the Registration Act, 1908 or operates as a venture capital scheme made by the Unit Trust of India established under the Unit Trust of India Act, 1963; and that has been granted a certificate of registration under the Securities and Exchange Board of India Act, 1992.

• Concern:

A Hindu undivided family, a firm, an association of persons, a body of individuals or a company.

• Liquidation:

The dissolution of a company by selling its assets to pay off its debts.

• Optimum capital structure:

A mix of equity capital and debt funds.

• Assessing officer:

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 subsection (1) or sub-section (2) of sec. 120 or any other provision of this Act, and the Joint Commissioner or Joint Director who is directed under clause (b) of subsection (4) of that section to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under this Act.

• Assessee in default:

An assessee shall be considered to be an Assessee in Default if he fails to pay tax within the time allowed originally or extended and to the person and place mentioned in the notice.

• Return of income:

A statement of total income and tax liability filled in the prescribed form duly signed and filed with the Income Tax Authority on or before the due date of furnishing of return.

Permanet Account NumIer:

A 10-digit code allotted to each assessee by the Income Tax Department.

Tax planning:

Planning in order to avail all exemptions, deductions and rebates provided in the Income Tax Act.

• Fringe benefit tax:

The tax levied on the employer in respect of fringe benefits provided/deemed to be provided by the employer to his employees during any financial year commencing on or after I April2005.

• Composite dealers:

Dealers with annual gross turnover not exceeding a certain threshold (threshold is decided by the respective state governments) can opt for a composition scheme whereby they will pay tax as a small percentage of their gross turnover. However, retailers opting for this composition scheme will not be entitled to Input Credit.

• Central sales tax:

The tax on sales of goods levied by the Central Government of India.

• Sale price:

The amount payable to a dealer as consideration for the sale of any goods
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