Indian Market, Regulation & Taxation — 60 Terms Defined

Additional Surveillance Measure Indian Market, Regulation & Taxation qualitative An exchange framework placing restrictions on securities showing unusual price or volume behaviour. Test: the security meets criteria on price variation, volume, delivery percentage, concentration or valuation over the review period

Advance Tax Indian Market, Regulation & Taxation ₹ Income tax paid in instalments during the financial year rather than as a lump sum at the end. Instalments: 15% by 15 June, 45% by 15 September, 75% by 15 December and 100% by 15 March, cumulative of the estimated liability

AMFI Indian Market, Regulation & Taxation qualitative The Association of Mutual Funds in India, the industry body that sets standards and publishes industry data. Test: the entity is a SEBI-registered mutual fund and a member of the association

Anchor Investor Indian Market, Regulation & Taxation qualitative A qualified institutional buyer allotted shares in an IPO a day before the issue opens to the public, at a fixed price. Test: the investor is a qualified institutional buyer allotted within the anchor portion, subject to a minimum application size and a lock-in

Annual Information Statement Indian Market, Regulation & Taxation qualitative A consolidated statement from the income tax department showing financial transactions reported against a taxpayer's PAN. Test: the transaction was reported to the tax department by a bank, broker, depository, fund house or registrar against the taxpayer's PAN

ASBA Indian Market, Regulation & Taxation qualitative Application Supported by Blocked Amount: the mechanism by which IPO application money is blocked in the applicant's bank account rather than debited. Test: the application amount is blocked in the investor's own bank account and debited only to the extent of shares actually allotted

Bank Nifty Indian Market, Regulation & Taxation index points The NSE's index of the most liquid large Indian banking stocks, used widely as a derivatives underlying. Index Value computed from free-float market capitalisation of its banking constituents, weighted and capped per index rules

Bombay Stock Exchange Indian Market, Regulation & Taxation qualitative Asia's oldest stock exchange, founded in 1875, whose benchmark index is the Sensex. Test: the security is admitted to trading on the BSE, which additionally assigns a numeric scrip code to each listed security

Business Income Indian Market, Regulation & Taxation ₹ Income from trading treated as a business rather than as investment, taxed at slab rates with expenses deductible. Business Income = Trading Profit - Deductible Expenses including brokerage, exchange charges, internet, depreciation and advisory fees

Capital Gains Tax Indian Market, Regulation & Taxation ₹ Tax on the profit realised when a capital asset is transferred. Taxable Gain = Sale Consideration - Cost of Acquisition - Cost of Improvement - Transfer Expenses

Carry Forward of Losses Indian Market, Regulation & Taxation ₹ The ability to carry an unabsorbed loss into future years to set off against future income of the permitted type. Test: the return is filed by the due date, and the loss is set off in later years only against income of the category the rules permit

CDSL Indian Market, Regulation & Taxation qualitative The Central Depository Services Limited, India's second depository, holding securities in electronic form. Test: the demat account number is a 16-digit numeric identifier

Commodity Transaction Tax Indian Market, Regulation & Taxation % A tax on the sell side of non-agricultural commodity derivative transactions on recognised exchanges. CTT = Sell-Side Transaction Value x Applicable Rate

Cost of Acquisition Indian Market, Regulation & Taxation ₹ The amount treated as having been paid for an asset, used as the base against which a capital gain is computed. Capital Gain = Sale Consideration - Cost of Acquisition - Transfer Expenses

Demat Account Indian Market, Regulation & Taxation qualitative An account with a depository in which securities are held in electronic form in the investor's name. Test: the account is opened with a depository participant and holds securities as a beneficial owner record at NSDL or CDSL

Dematerialisation Indian Market, Regulation & Taxation qualitative The conversion of physical share certificates into electronic holdings in a demat account. Test: the physical certificate is surrendered to the depository participant and an equivalent electronic credit is made to the demat account

Depository Indian Market, Regulation & Taxation qualitative An institution that holds securities in electronic form and enables their transfer between accounts. Test: the entity is registered with SEBI as a depository and maintains securities in dematerialised form for beneficial owners

Dividend Taxation Indian Market, Regulation & Taxation ₹ The taxation of dividends in the hands of the shareholder at their applicable slab rate, following the 2020 change. Tax on Dividend = Dividend Received x Marginal Slab Rate, with TDS deducted by the company above a threshold

First In, First Out Indian Market, Regulation & Taxation qualitative The convention that the earliest-acquired units of a security are treated as sold first. Test: on a partial sale, the cost and holding period of the oldest lot are used first, then the next oldest

Foreign Portfolio Investor Indian Market, Regulation & Taxation qualitative A non-resident investor registered with SEBI to invest in Indian securities markets. Test: the entity holds a SEBI FPI registration in the applicable category and invests within prescribed limits

Front Running Indian Market, Regulation & Taxation qualitative Trading ahead of a known large order to profit from the price movement that order will cause. Test: a person with knowledge of an impending substantial order transacts in the same security before that order is executed

GIFT City Indian Market, Regulation & Taxation qualitative India's international financial services centre in Gujarat, where transactions occur in foreign currency under a separate regulator. Test: the entity or transaction is located in the International Financial Services Centre and regulated by the IFSC Authority

Graded Surveillance Measure Indian Market, Regulation & Taxation qualitative An exchange framework applying escalating restrictions to securities with weak fundamentals or unusual price behaviour. Test: the security meets criteria on net worth, net income, price-to-earnings, market capitalisation or price movement, placing it in one of six stages

Grandfathering Indian Market, Regulation & Taxation ₹ The rule protecting gains accrued before long-term capital gains tax on listed equity was reintroduced in 2018. Deemed Cost = Higher of (Actual Cost) and (Lower of Fair Market Value on 31 January 2018 and Sale Consideration)