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Deconstruct complex jargon used by Indian banks, tax authorities, and mutual fund managers. Clear definitions, statutory formulas, and direct links to calculate your numbers.
Income tax paid in installments during the financial year rather than as a lump sum at the end.
Under Section 208 of the Income Tax Act, any individual or business whose estimated annual tax liability exceeds ₹10,000 (after adjusting for TDS) must pay advance tax in four quarterly installments: 15% by June 15, 45% by Sept 15, 75% by Dec 15, and 100% by March 15.
The schedule of spreading loan repayments into equal monthly installments over time.
Loan amortization breaks each monthly EMI into two components: principal repayment and interest charge. In the initial years of a loan, interest comprises the bulk of payments, while principal reduction accelerates in later years.
A comprehensive financial statement issued by the Income Tax Department reflecting all high-value transactions.
AIS contains detailed records of stock trades, mutual fund redemptions, dividend payouts, bank interest, foreign remittances, and property sales tied to your PAN.
The core base component of an employee's salary package before adding allowances or bonuses.
Basic salary serves as the mathematical foundation for statutory deductions in India: EPF (12% of Basic), Gratuity (15/26 of Basic), and HRA exemption calculations.
The mean annual growth rate of an investment over a specified period of time longer than one year.
CAGR represents the smoothed annual rate at which your capital would have grown if compounding occurred at a constant rate each year.
A 3-digit numeric summary of your credit history and repayment track record ranging from 300 to 900.
TransUnion CIBIL scores above 750 qualify borrowers for the lowest tier home and auto loan interest rates from scheduled Indian commercial banks.
The total expenditure an employer incurs on hiring and maintaining an employee annually.
CTC includes direct monthly salary as well as indirect employer contributions (Employer EPF, gratuity provisions, group medical insurance, and variable performance incentives).
RBI subsidiary providing sovereign insurance cover on bank deposits up to ₹5,00,000 per depositor.
DICGC guarantees that in the rare event of a commercial or cooperative bank liquidation, each depositor is legally insured for up to ₹5 Lakhs across all accounts (savings, current, and fixed deposits).
The benchmark interest rate linked directly to external market markers (primarily the RBI Repo Rate) to price retail loans.
Mandated by the RBI since October 2019, all floating-rate retail loans (home, auto, personal) must be linked to an external benchmark, ensuring rapid and transparent transmission of RBI repo rate changes.
The holy grail of Indian tax classification where deposit, interest, and maturity are all 100% tax-free.
PPF (Public Provident Fund) and Sukanya Samriddhi Yojana enjoy EEE status: the initial deposit is tax-deductible under 80C, annual accrued interest is tax-free, and final maturity withdrawal is completely exempt from income tax.
Statutory government-backed retirement scheme where salaried employees and employers each contribute 12% of basic pay.
EPFO manages contributions, currently yielding 8.25% annual interest. Contributions up to ₹2.5 Lakhs per year generate 100% tax-free interest.
The percentage of a borrower's net monthly income committed to paying existing and proposed loan EMIs.
Banks use FOIR to assess loan eligibility, typically capping maximum allowable EMIs at 50% to 60% of monthly net salary to prevent over-leverage.
Certificate issued by employers showing total salary paid and TDS deducted under Section 203.
Part A shows quarterly tax deposited with the government (TIN-NSDL receipt numbers), while Part B details the salary breakup, standard deduction, and Chapter VI-A deductions.
Statutory lump-sum monetary benefit paid to employees upon completing 5 or more years of continuous service.
Under the Payment of Gratuity Act 1972, gratuity is calculated as (15 × Last Basic Salary × Completed Years) / 26. Tax-exempt up to ₹20,00,000.
A salary component intended to cover rental housing expenses, eligible for statutory tax exemptions.
Exempt under Section 10(13A) as the least of: actual HRA received, rent paid minus 10% of basic, or 50%/40% of basic salary in metro/non-metro cities.
Profits realized on selling capital assets held longer than the statutory threshold period.
For listed equity shares and mutual funds held over 12 months, LTCG is taxed at 12.5% on gains exceeding ₹1.25 Lakh per financial year (post-Budget 2024).
Voluntary government-sponsored long-term market-linked pension scheme regulated by PFRDA.
Offers an exclusive additional tax deduction of ₹50,000 under Section 80CCD(1B) beyond the ₹1.5L 80C limit. At age 60, 60% can be withdrawn tax-free, while 40% must purchase an annuity.
The per-unit market value of a mutual fund scheme's total portfolio assets minus its liabilities.
Calculated daily after market close by Asset Management Companies (AMCs) based on the closing price of underlying securities.
15-year sovereign-backed savings instrument offering 7.10% guaranteed interest and EEE tax-free status.
A cornerstone of conservative wealth planning in India. Minimum deposit is ₹500 and maximum is ₹1,50,000 per financial year.
The benchmark interest rate at which the Reserve Bank of India lends short-term funds to commercial banks.
The primary tool used by the RBI Monetary Policy Committee to manage liquidity and control inflation. Floating retail loan interest rates move directly in tandem with the repo rate.
Tax rebate allowing Indian resident individuals with net taxable income up to ₹7,00,000 to pay zero tax.
In the New Tax Regime, Section 87A offers up to ₹25,000 in tax rebates. Combined with the ₹75,000 standard deduction, salaried employees earning up to ₹7,75,000 pay zero tax.
Disciplined investing method allowing automated periodic investments of a fixed sum into mutual funds.
SIP eliminates market timing risk through Rupee Cost Averaging and harnesses compound interest over multi-year horizons.
Facility allowing investors to redeem a predetermined sum from a mutual fund scheme at regular intervals.
Highly tax-efficient method to generate monthly retirement income since withdrawals consist of both principal and capital gains.
Annualized rate of return calculation for irregular, multiple cash inflows and outflows across different dates.
Mandatory metric used to evaluate mutual fund SIP returns and multi-tranche stock purchases where simple CAGR fails.