Business Glossary

A binding agreement between a taxpayer and tax authority that predetermines the transfer pricing methodology for international transactions over a fixed period.

A tax on share premiums exceeding fair market value when unlisted companies issue shares, historically controversial for startups raising early-stage funding.

A mandatory yearly meeting of company shareholders required under the Companies Act 2013 to approve accounts and appoint auditors.

A yearly filing with the MCA containing details of shareholders, directors, debt, and compliance status of an Indian company.

The MCA form used to file a company's audited financial statements, including balance sheet and profit and loss account, after the AGM.

An international certification that authenticates documents for use in countries that are members of the Hague Apostille Convention.

The principle requiring related-party transactions to be priced as if conducted between independent parties, mandated by Section 92 of the Income Tax Act for international and specified domestic transactions.

A legal document governing a company's internal management, director powers, share transfer rules, and meeting procedures under Section 5 of the Companies Act 2013.

The maximum amount of share capital a company is legally permitted to issue, as specified in its Memorandum of Association under Section 2(8) of the Companies Act 2013.

A bank licensed by the Reserve Bank of India to deal in foreign exchange and handle cross-border investment transactions.

The FDI entry channel where foreign investors can invest in Indian companies without prior government approval.

An OECD/G20 initiative comprising 15 action plans to combat tax avoidance strategies that exploit gaps in international tax rules to shift profits to low-tax jurisdictions.

A mandatory product quality certification issued by the Bureau of Indian Standards for goods sold or imported into India under specified categories.

A formal meeting of a company's board of directors to discuss strategy, approve accounts, and pass resolutions under the Companies Act 2013.

An extension of a foreign parent company in India, permitted under FEMA regulations to carry out specific business activities.

Tax on profits from the sale or transfer of capital assets like shares, property, or business interests, with rates depending on holding period.

An official document issued by the Registrar of Companies confirming a company's legal existence and assigning its Corporate Identity Number.

A qualified professional responsible for ensuring a company's compliance with the Companies Act 2013, SEBI regulations, and other statutory requirements.

A month-by-month schedule of all regulatory filing deadlines for Indian companies, covering MCA, Income Tax, GST, RBI, and other statutory obligations.

Preference shares that must convert into equity shares within a specified period, commonly used in FDI-funded startups and venture deals in India.

The direct tax levied on the net income of companies registered in India, with rates ranging from 15% to 30% depending on the chosen tax regime.

A government-notified index used to adjust the purchase price of assets for inflation when calculating long-term capital gains tax in India.

An OECD-developed global standard for automatic exchange of financial account information between tax authorities, implemented in India under Section 285BA of the Income Tax Act.

An electronic credential issued by a Certifying Authority that authenticates the identity of a person filing documents with MCA and other government portals.

A unique 8-digit number assigned by MCA to every individual appointed as a director of an Indian company under Section 153 of the Companies Act 2013.

Tax on dividend income distributed by Indian companies to shareholders, shifted from company-level DDT to shareholder-level taxation since April 2020.

A bilateral treaty between India and another country that prevents the same income from being taxed in both jurisdictions.

Tax relief mechanisms under Indian law that prevent the same income from being taxed in both India and another country, available through DTAAs or unilateral provisions.

A loan raised by an Indian entity from a non-resident lender in foreign currency or INR, regulated by the RBI under FEMA guidelines.

The process of getting a document authenticated by a country's embassy or consulate for legal use in that country.

A social security scheme under the ESI Act, 1948 providing medical, sickness, maternity, and disability benefits to employees earning up to INR 21,000 per month in India.

US federal laws requiring US persons to report foreign financial accounts (FBAR/FinCEN 114) and foreign financial institutions to report US account holders to the IRS (FATCA).

Mandatory RBI form filed when an Indian company issues shares or convertible instruments to a foreign investor.

A foreign currency fixed deposit account for NRIs that eliminates exchange rate risk and offers tax-free interest in India.

A document issued by an Authorized Dealer bank in India confirming receipt of foreign currency remittance from abroad, serving as proof of foreign investment or export proceeds.

Investment by a foreign entity into an Indian business, granting ownership stake and management control under FEMA regulations.

India's primary law governing foreign exchange transactions, cross-border investments, and overseas remittances since 1999.

A mandatory declaration filed by non-residents with the Indian Income Tax Department to claim DTAA benefits, providing tax residency details as required under Section 90(5) of the Income Tax Act.

Mandatory forms for reporting foreign remittances from India — 15CA is the online declaration by the remitter, and 15CB is a CA certificate verifying tax compliance.

A TDS certificate issued by the deductor to the deductee for tax deducted at source on non-salary payments such as interest, rent, professional fees, and dividends.

Indian tax provisions under Sections 95-102 of the Income Tax Act that empower authorities to deny tax benefits from arrangements whose principal purpose is obtaining a tax advantage.

India's first International Financial Services Centre in Gujarat, offering a special tax and regulatory regime for global financial services, fund management, and fintech operations.

India's unified indirect tax on the supply of goods and services, replacing multiple state and central levies since July 1, 2017.

The FDI entry channel where foreign investors must obtain prior approval from the Indian government before investing.

The process of obtaining a unique GSTIN from the GST portal, mandatory for businesses exceeding the turnover threshold or making inter-state supplies.

An international treaty that simplifies document authentication between member countries by replacing embassy legalization with a single apostille certificate.

A 10-digit code issued by DGFT that is mandatory for any person or entity importing or exporting goods and services from India.

An annual filing with the Income Tax Department declaring a company's income, deductions, and tax liability for the assessment year.

A business arrangement where a foreign company and an Indian partner jointly own and operate a company registered in India.

Mandatory identity verification process required by RBI, SEBI, and other Indian regulators before opening bank accounts, making investments, or incorporating companies in India.

A representative office of a foreign company in India that can only perform non-commercial liaison activities under RBI approval.

An RBI scheme allowing Indian residents to remit up to $250,000 per financial year abroad for investment, education, travel, and other permitted purposes.

A treaty provision in DTAAs that restricts tax benefits to residents who meet specific ownership, activity, or economic substance tests, preventing treaty shopping.

A hybrid business entity combining partnership flexibility with limited liability protection, governed by the LLP Act 2008.

A foundational legal document defining a company's name, registered office, objects, liability, and capital structure under Section 4 of the Companies Act 2013.

A minimum tax of 15% on book profits that applies when a company's tax liability under normal provisions falls below 15% of its book profit.

A company registered with the RBI that provides financial services like lending, investment, and insurance without holding a banking licence.

A rupee-denominated bank account for NRIs that allows free repatriation of both principal and interest to the account holder's country of residence.

An Indian citizen or Person of Indian Origin who resides outside India for more than 182 days in a financial year.

A rupee-denominated bank account for NRIs to manage income earned in India, with limited repatriation of up to $1 million per financial year.

A registration status granted to foreign citizens of Indian origin that provides a lifelong visa and the right to work and invest in India.

A company with a single member and limited liability, introduced under Section 2(62) of the Companies Act 2013.

The actual amount of money shareholders have paid to the company for their shares, representing real funds received by the company under Section 2(64) of the Companies Act 2013.

A unique 10-character alphanumeric identifier issued by the Income Tax Department to individuals and entities for tracking tax-related transactions in India.

A fixed place of business in India through which a foreign enterprise carries on its operations, triggering Indian tax liability on business profits.

A Government of India scheme offering financial incentives (4-6% of incremental sales) to manufacturers in 14 key sectors to boost domestic production and attract foreign investment.

A DPIIT notification requiring prior government approval for all FDI from countries sharing a land border with India.

A business entity registered under the Companies Act 2013 with limited liability protection and restricted share transferability.

A state-level employment tax in India levied on salaried employees and professionals, with rates varying by state up to a constitutional maximum of INR 2,500 per year.

A temporary office established by a foreign company in India to execute a specific project, approved by RBI under FEMA regulations.

A company that can offer shares to the general public, requiring minimum 7 members and 3 directors under the Companies Act 2013.

The official address of a company filed with the Registrar of Companies, used for all government communications and legal notices under Section 12 of the Companies Act 2013.

The transfer of money out of India to a foreign country, covering dividends, sale proceeds, profits, and investment returns.

A director of an Indian company who has stayed in India for at least 120 days during the previous calendar year, as required by the Companies Act.

An Indian government scheme that refunds embedded central, state, and local taxes on exported goods that are not rebated under other mechanisms.

An MCA web service that allows applicants to reserve a proposed company or LLP name for 60 days before filing for incorporation.

Rules under Indian transfer pricing law that provide pre-determined profit margins or pricing thresholds, shielding qualifying transactions from further scrutiny.

A financial intermediary registered with SEBI to manage public offerings, private placements, M&A advisory, and other capital market activities in India.

A geographically demarcated zone in India with special fiscal incentives, streamlined customs procedures, and relaxed regulations designed to promote exports and attract foreign investment.

An integrated MCA web form that consolidates company incorporation, PAN, TAN, GST, EPFO, and ESIC registration into a single application.

A legally mandated annual audit of a company's financial records conducted by an independent Chartered Accountant under the Companies Act 2013.

A 10-digit alphanumeric number required by every entity that deducts or collects tax at source in India under the Income Tax Act.

A mechanism where the payer deducts income tax at prescribed rates before making payments for salaries, rent, professional fees, and other specified transactions.

A certificate issued by a country's tax authority confirming an entity's tax residency, required to claim benefits under India's Double Taxation Avoidance Agreements.

Tax rules requiring transactions between related parties in different countries to be priced at arm's length, as mandated by Sections 92-92F of the Income Tax Act.

An Indian company where 100% of the shares are held by a single foreign parent company, operating as a separate legal entity.

Tax deducted at the point of payment on income earned by non-residents from Indian sources, including royalties, interest, dividends, and fees for services.