GCC India Glossary

FEMA Compounding

Voluntary process by which an entity settles an admitted FEMA contravention by paying a compounding fee to RBI, avoiding criminal prosecution.

Double Taxation Avoidance Agreement

Bilateral treaty between India and another country that allocates taxing rights and reduces or eliminates double taxation on income earned across borders.

External Commercial Borrowing

Commercial loans availed by eligible Indian entities from non-resident lenders, governed by RBI's ECB framework.

Foreign Currency Gross Provisional Return

RBI filing reporting share allotment to a foreign investor; due within 30 days of allotment.

Foreign Currency Transfer of Shares

RBI filing reporting transfer of shares between an Indian resident and a person resident outside India.

Automatic Route FDI

FDI route allowing 100 percent foreign investment without prior government or RBI approval, subject to sectoral caps.

Foreign Exchange Management Act 1999

The Indian law governing all cross-border foreign exchange transactions, replacing FERA in 1999.

Foreign Inward Remittance Certificate

Certificate issued by the receiving Authorised Dealer bank confirming receipt of foreign inward remittance.

Foreign Investment Reporting and Management System

RBI's single online portal for reporting all foreign investment transactions including FDI, ODI, ECB, and LRN applications.

Foreign Liabilities and Assets Return

Annual RBI filing reporting foreign liabilities and assets of Indian companies; due 15 July each year.

Information for Foreign Remittance

Online declaration filed with the Income Tax Department before making certain foreign remittances from India.

CA Certificate for Foreign Remittance

Chartered Accountant certificate certifying TDS deduction details on payments to non-residents.

ECB Registration Form

RBI form for registering a new External Commercial Borrowing to obtain a Loan Registration Number (LRN), and monthly ECB-2 return for ongoing reporting.

Liberalised Remittance Scheme

Scheme permitting Indian residents to remit up to USD 250,000 per financial year for permitted current and capital account transactions.

Non-Resident External Account

Indian rupee account held by a Non-Resident Indian (NRI) or Person of Indian Origin (PIO) where principal and interest are fully repatriable and tax-free in India.

Non-Resident Ordinary Account

Indian rupee account for NRIs to manage income earned in India such as rent, dividends, or pension; repatriation capped at USD 1 million per financial year.

Overseas Direct Investment

Investment by an Indian entity in equity or debt of a foreign entity, governed by FEMA's ODI rules.

SOFTEX Form

Mandatory RBI declaration filed for export of software, services, or IP from India exceeding USD 25,000 per invoice.

Form ADT-1

MCA filing intimating the appointment of statutory auditor for an Indian company.

Annual General Meeting

Mandatory annual meeting of shareholders to approve financial statements, declare dividends, appoint auditors, and transact ordinary business.

Form AOC-4

Annual MCA filing of audited financial statements; due within 30 days of the AGM.

Form BEN-2

MCA filing reporting Significant Beneficial Owners (SBOs) holding 10 percent or more beneficial interest.

Board of Directors Meeting

Formal meeting of the board of directors required at prescribed intervals to transact board-level business including approving financial results and key decisions.

Corporate Identification Number

Unique 21-character identification number assigned by ROC to every registered Indian company at incorporation.

CS

Statutory officer required in prescribed companies who ensures compliance with the Companies Act, maintains secretarial records, and advises the board on governance.

Director Identification Number

Unique 8-digit identification number issued by MCA to every director of an Indian company.

Director KYC

Annual KYC filing by every individual holding a DIN as of 31 March of the financial year.

Digital Signature Certificate

Cryptographic certificate enabling directors to sign electronic filings on MCA21, GST, and Income Tax portals.

Internal Financial Controls

Policies and procedures adopted by a company to ensure orderly and efficient conduct of business, safeguarding of assets, and prevention and detection of fraud.

Form INC-22

MCA filing to confirm or change the registered office address of an Indian company.

Key Managerial Personnel

Statutorily designated officers of larger Indian companies including CEO, CFO, MD, and Company Secretary.

Form MGT-7

Annual MCA return covering company shareholders, directors, and corporate structure; due within 60 days of AGM.

Memorandum of Association

Charter document of an Indian company defining its name, registered office, objects, capital, and liability.

MCA Annual Filing

Umbrella term for mandatory annual and event-based filings submitted by Indian companies to the Registrar of Companies via the MCA21 portal.

Form MR-3

Independent audit by a practicing Company Secretary verifying compliance with the Companies Act, SEBI regulations, FEMA, and other applicable laws.

SPICe Plus

Single integrated MCA21 form for company incorporation, replacing multiple separate registrations.

External Auditor

Chartered Accountant or CA firm appointed under the Companies Act to conduct the annual statutory audit and issue an opinion on the financial statements.

Pay-as-you-earn Tax

Instalment-based income tax payment required when estimated tax liability exceeds INR 10,000 in a financial year, paid in four instalments throughout the year.

ALP

The price at which unrelated parties would transact in comparable circumstances; the standard used for benchmarking intercompany pricing in India's transfer pricing regulations.

Annual TDS Certificate

Annual TDS certificate issued by employer to employees, comprising Part A from TRACES and Part B prepared by employer.

Quarterly TDS Return Salary

Quarterly return filed with the Income Tax Department reporting TDS deducted on salaries.

Tax Credit Statement

Consolidated annual tax statement showing TDS, TCS, advance tax, self-assessment tax, and high-value transactions linked to a PAN.

Quarterly Non-Salary TDS Return

Quarterly TDS return for non-salary payments such as professional fees, rent, commission, and contractor payments.

Tax Audit Report

Chartered Accountant's tax audit report providing detailed clause-wise disclosure of compliance with income tax provisions, mandatory for entities exceeding prescribed turnover thresholds.

Transfer Pricing Audit Report

Chartered Accountant report certifying transfer pricing of international transactions between associated enterprises.

Income Tax Return for Companies

Annual income tax return form filed by every company other than those claiming exemption under Section 11.

Minimum Alternate Tax

Tax computed at 15 percent of book profits, applicable when normal income tax payable is lower than MAT.

PE

Fixed place of business through which the business of an enterprise is wholly or partly carried on, triggering source-country taxation of business profits under India's tax treaties.

SEZ Unit Tax Exemption

Income tax deduction for units in Special Economic Zones on export profits: 100 percent for first 5 years, 50 percent for next 5 years, and 50 percent for a further 5 years subject to transfer to SEZ Reinvestment Reserve.

TDS on Payments to Non-Residents

Income Tax provision requiring TDS deduction on any sum chargeable to tax paid to a non-resident, including royalties, fees for technical services, and interest.

Higher TDS for Non-Filers

Provision requiring higher TDS or TCS deduction at twice the prescribed rate (or 5 percent, whichever is higher) from specified persons who have not filed income tax returns for the two preceding years.

Section 80IC Deduction

Income tax deduction of 100 percent (first 5 years) and 25 percent (next 5 years) for eligible manufacturing and production units in specified states including Himachal Pradesh, Uttarakhand, and North-East.

Tax Deduction and Collection Account Number

Unique 10-character alphanumeric identifier required by every person responsible for deducting or collecting tax at source.

Section 192 TDS

Income Tax Act provision requiring employers to deduct tax at source on salary payments to employees.

Indian Transfer Pricing Regulations

Tax rules requiring international transactions and specified domestic transactions between associated enterprises to be at arm's length price.

Central GST

Dual GST levied on intra-state supplies of goods and services, with CGST collected by the Centre and SGST by the state government in equal proportions.

Electronic Invoicing

Mandatory real-time reporting of B2B invoices to the Invoice Registration Portal (IRP) which generates a unique Invoice Reference Number (IRN) and QR code.

GST Threshold

Mandatory GST registration is required once aggregate turnover exceeds INR 20 lakh (INR 10 lakh for special category states) or immediately for inter-state suppliers and e-commerce operators regardless of turnover.

Monthly Outward Supplies Return

Monthly GST return reporting invoice-level details of all outward supplies of goods and services.

Monthly GST Summary Return

Monthly summary GST return reporting outward supplies, inward supplies, and tax payable; due by 20th of following month.

Annual GST Return

Annual consolidated GST return reconciling monthly GSTR-1, GSTR-3B, and books for the financial year.

Integrated Goods and Services Tax

GST levied on inter-state supplies of goods and services and on imports; collected by the central government and apportioned between Centre and destination state.

ITC

Credit of GST paid on inward supplies that can be offset against GST liability on outward supplies, subject to eligibility conditions.

Letter of Undertaking

Annual undertaking enabling export of goods or services without payment of IGST under bond.

RCM

GST mechanism under which the recipient of specified goods or services is liable to pay tax directly to the government instead of the supplier.

Zero Rated GST

GST category for exports of goods or services and supplies to SEZ units where the effective GST rate is zero and the supplier may claim refund of accumulated input tax credit.

Wage Code

Consolidated central legislation rationalising wage payment, minimum wages, bonus, and equal remuneration across all establishments.

CLRA

Central legislation regulating employment of contract labour through contractors in establishments with 20 or more contract workers, requiring registration and contractor licensing.

EPF Act

Central statute mandating provident fund, pension (EPS), and deposit-linked insurance (EDLI) contributions for establishments employing 20 or more persons.

Electronic Challan-cum-Return

Monthly EPFO filing combining contribution challan and return; due by 15th of every month.

Employees Pension Scheme 1995

Pension scheme under EPFO where 8.33 percent of employer's 12 percent EPF contribution (on wages up to INR 15,000) goes towards employee pension, ensuring a monthly pension post-retirement.

Employees State Insurance Corporation

Statutory medical insurance scheme for Indian employees earning up to INR 21,000 per month; employer contributes 3.25 percent.

Factories Act

Central legislation governing health, safety, welfare, and working conditions in factories; applicable to premises employing 10 or more workers with power or 20 without power.

ID Act

Central legislation governing investigation and settlement of industrial disputes, layoffs, retrenchment, and closure of industrial establishments.

LWF

State-level statutory fund requiring employer and employee contributions to provide welfare amenities such as housing, education, and medical care to workers.

MBA

Central statute requiring employers to grant paid maternity leave of 26 weeks (for first two children) and other maternity benefits to women employees.

Minimum Wages

Central legislation enabling central and state governments to fix minimum wage rates for workers in scheduled employments; being consolidated into the Code on Wages 2019.

Bonus Act

Statute requiring payment of annual bonus to eligible employees earning up to INR 21,000 per month, at a minimum of 8.33 percent and maximum of 20 percent of annual wages.

Gratuity Act

Statute requiring lump-sum gratuity payment to employees on cessation of employment after 5 years of continuous service.

Prevention of Sexual Harassment Act

Statutory framework requiring all workplaces to prevent, prohibit, and redress sexual harassment of women at work.

PT

State-level tax on employment income deducted by employers, with slab rates varying by state.

State Shops Act

State-level legislation governing working conditions, hours, leave, and termination in commercial establishments including IT and ITeS offices.

Data Controller (DPDP equivalent)

Any person who alone or jointly determines the purpose and means of processing personal data under the DPDP Act 2023.

Digital Personal Data Protection Act 2023

India's principal data protection law enacted in August 2023, governing all processing of personal data of Indian residents.

SDF

Category of Data Fiduciary processing personal data at scale or sensitivity meeting thresholds notified by the Central Government.

BO

Office of a foreign company in India permitted to undertake specified commercial activities, subject to RBI approval.

LO

Office of a foreign company in India restricted to liaison, representation, and information collection activities, with no commercial transactions permitted.

Limited Liability Partnership

Hybrid entity form combining partnership flexibility with limited liability protection, governed by the LLP Act 2008.

Pvt Ltd

Most common Indian corporate form, with limited liability, minimum 2 directors and 2 shareholders, and restricted share transferability.

Not-for-Profit Company

Indian company incorporated with the objective of promoting commerce, art, science, education, or other charitable purposes, with profits reinvested in the objects and no dividend distribution.

WOS

Indian Private Limited Company where 100 percent of equity is held by a single foreign parent company.

Government e-Marketplace

Government of India's online procurement portal for purchase of goods and services by central and state government ministries and departments, providing a direct market for registered sellers.

Karnataka IT/ITES Policy 2020-25

State policy providing incentives, infrastructure access, and single-window clearance for IT and ITeS companies establishing in Karnataka.

Udyam Registration

Voluntary registration on the Udyam portal classifying a business as Micro, Small, or Medium Enterprise based on investment and turnover criteria, unlocking priority sector lending, government procurement preferences, and delayed payment protections.

Production-Linked Incentive Scheme

Central government incentive scheme providing cash incentives on incremental sales over a base year, for sectors including IT hardware, telecom, and pharmaceuticals.

Special Economic Zone

Designated zones in India providing tax incentives and procedural concessions to export-oriented units.

DPIIT Startup Recognition

Government initiative providing DPIIT recognition to eligible startups, unlocking tax exemptions, simplified compliance, faster IP filing, and self-certification under labour and environment laws.

Software Technology Parks of India

Autonomous society under MeitY providing single-window certification for IT and ITeS export units, with SOFTEX attestation services.

Udyam Certificate

Online self-declaration registration on the government Udyam portal that officially classifies an entity as an MSME, replacing the older Udyog Aadhaar system.