Modules for Personal Finance
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Glossary of Investment Analysis Terms & Definitions
1. Income tax: Percentage of your income to the government for the facilities the government is providing.
2. Long-term capital gains: or losses apply to the sale of an investment made after owning it 12 months or longer.
3. Short-term capital gains: happens when an investment which is sold has been held for less than one year, for example a stock.
4. Tax-loss Harvesting: Tax-loss harvesting strategy involves selling off loss-making stocks in your portfolio.
5. ULIP: The market-linked insurance plans are called unit-linked insurance.
6. Provident Funds: Provident funds provide employees with lump sum payments at the time of exit from their place of employment.
7. Sole Proprietorship: The business which is run by an individual for his or her own profit is called sole proprietorship.
8. Limited Liability Company (LLC): A hybrid between partnership and Corporation is known as a limited liability company.
9. Domestic company: the companies which are registered under the Companies Act of India.
10. Foreign company- the company which is not registered under the Companies Act of India and whose control is located outside India is a foreign company.
11. Direct tax: Tax liabilities that are paid directly to the central government are direct taxes. Individuals and organisations with taxable income have to pay it.
12. Indirect Taxes: These taxes are not levied on individuals but on goods and services. This tax is not levied on profit, income or the revenue of an individual or an entity.
13. Fringe benefits tax – Fringe benefits tax is accounted for on the benefits such as accommodation expenses, travel allowance, employee’s contribution to the retirement fund, etc.
14. Customs Duty: If you buy a product from a different country and import it to India, then you have to pay tax on it. This tax is called Customs Duty.
15. Toll Tax: is levied either by the state or central governments on roads and bridges. The purpose of the tax is to fund road construction and maintenance activities.
16. HUFs: HUF means Hindu Undivided Family. You can save taxes by creating a family unit and pooling in assets to form a HUF.
17. ITR: Full form of ITR is Income Tax Return. It is a form in which the taxpayers file information about his income earned and tax applicable to the income tax department.
18. Mutual Funds: pool money from the investing public and use that money to buy other securities, usually stocks and bonds.
19. ETFs: or Equity Exchange Traded Funds are the funds which are collected when the financial resources of a group of people are pooled and used for purchase of various tradable monetary assets including shares, debt securities (bonds and derivatives).
20. Dividend: is a fragment of the earnings that a company acquires and issues amongst its investors.
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