Appendix F: Glossary

Accreted income

FMV of assets of an NPO less liabilities, taxed on exit from the NPO regime

Adjusted gross total income

Base for the 10% donation cap under section 133

AE

Associated enterprise, a related party under the transfer pricing rules

ALP

Arm's length price: the price unrelated parties would agree in similar conditions

AMT

Alternate Minimum Tax for non-corporate taxpayers claiming certain deductions

APA

Advance Pricing Agreement fixing TP method or price for future years

Arm's length range

35th to 65th percentile of comparable results

Assessee in default

A person who fails to deduct or pay tax as required, or to pay a demand

Block period

Six years before the year of search plus the part of the year of search

Book profit

Profit as per financial statements adjusted for MAT purposes

Business connection

A real and intimate relation between a non-resident's business and activity in India

Capital Gains Accounts Scheme

Bank deposit scheme to park unutilised capital gains pending reinvestment

CbCR

Country-by-country report for large multinational groups

Corpus donation

Donation to an NPO with a specific direction to form part of its corpus

Cost Inflation Index

Index notified each year for indexation of cost

Deemed owner

Person treated as owner of house property though not the legal owner

DIN

Document Identification Number on every departmental communication

DTAA

Double Taxation Avoidance Agreement, a tax treaty

EBITDA

Earnings before interest, tax, depreciation and amortisation

FAR analysis

Functions, assets and risks analysis in transfer pricing

Form 168

Annual tax statement (old Form 26AS)

FTS

Fees for technical services: managerial, technical or consultancy services

GAAR

General Anti-Avoidance Rule

ICDS

Income Computation and Disclosure Standards

ITC

Input tax credit under GST

Marginal relief

Relief that limits tax increase to the income above a threshold

MAT

Minimum Alternate Tax on book profit of companies

MLI

Multilateral Instrument that modifies tax treaties, including the Principal Purpose Test

Net worth (slump sale)

Aggregate value of assets of the undertaking less its liabilities, as defined

Partial integration

Method of using exempt agricultural income to determine the rate on other income

PE

Permanent establishment: a taxable presence of a foreign enterprise

POEM

Place of effective management of a company

Presumptive taxation

Income deemed at a fixed percentage of turnover or receipts

RNOR

Resident but not ordinarily resident

SDT

Specified domestic transaction under transfer pricing

Secondary adjustment

Adjustment to align cash with the TP adjusted position

SEP

Significant economic presence, a digital business connection test

Slump sale

Transfer of an undertaking for a lump sum without values assigned to individual assets

Specified person (clubbing and related party)

Relatives, substantial interest holders and connected entities as defined

Tax residency certificate

Certificate from the home country confirming residence for treaty purposes

Tax Year

The 12 months from 1 April to 31 March in which income is earned (section 3)

TNMM

Transactional Net Margin Method

TRC

Tax Residency Certificate

Unabsorbed depreciation

Depreciation not set off due to insufficient profits, carried forward without limit

WDV

Written down value of a block of assets