Glossary
HR & GST glossary for Indian businesses.
Plain-English definitions of payroll, labour-law and GST terms — with formulas, examples and official sources.
HR & Payroll
GratuityGratuity is a lump-sum statutory payment an employer makes to an employee on leaving after continuous service, calculated under the Payment of Gratuity Act, 1972.Provident Fund (EPF)The Employees' Provident Fund (EPF) is a retirement savings scheme where both employer and employee contribute a percentage of wages every month into an account maintained by EPFO.ESI (Employees' State Insurance)Employees' State Insurance (ESI) is a self-financing social security scheme that gives medical, cash and other benefits to employees earning below a notified wage ceiling, administered by ESIC.Professional TaxProfessional tax is a state-level tax on salaried employees and professionals, deducted monthly by the employer and remitted to the state government.CTC (Cost to Company)CTC (Cost to Company) is the total yearly cost an employer bears for an employee, including fixed pay, variable pay, and employer contributions — not the amount credited to the employee's bank account.Gross SalaryGross salary is the total salary an employee earns before any statutory or voluntary deductions — including basic pay, allowances and bonuses, but excluding deductions like PF, professional tax and TDS.Notice PeriodA notice period is the advance intimation period an employee or employer must give before ending employment, as specified in the employment contract or the applicable Shops & Establishments / Standing Orders rules.Full and Final Settlement (FnF)Full and Final Settlement (FnF) is the process of calculating and paying all dues owed to an employee — and recovering anything owed by them — when their employment ends.POSH ActThe POSH Act (Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013) requires employers to prevent, prohibit and redress sexual harassment complaints at the workplace through an Internal Committee.HRA (House Rent Allowance)House Rent Allowance (HRA) is a salary component paid to employees towards rent, partly exempt from income tax under Section 10(13A) of the Income-tax Act if the employee actually pays rent.Form 16Form 16 is the annual TDS certificate an employer issues to an employee, showing the salary paid and tax deducted at source during the financial year.UAN (Universal Account Number)A Universal Account Number (UAN) is a unique 12-digit number EPFO assigns to every EPF member, which stays the same across employers throughout their career.Minimum WagesThe Minimum Wages Act, 1948 requires employers to pay at least the minimum rate of wages fixed by the central or state government for the specific scheduled employment and skill category.Leave EncashmentLeave encashment is the payment an employee receives for unused earned/privilege leave, either during service (per company policy) or at retirement/resignation.Payment of Bonus ActThe Payment of Bonus Act, 1965 requires eligible establishments to pay an annual statutory bonus to employees within a specified wage limit, based on the employer's profits or a minimum statutory percentage.
GST & Billing
HSN CodeHSN (Harmonized System of Nomenclature) code is an internationally standardised numeric code used to classify goods for GST and customs purposes.GSTINGSTIN (Goods and Services Tax Identification Number) is a unique 15-digit alphanumeric number assigned to every entity registered under GST.E-InvoiceE-invoicing under GST is the process of electronically authenticating B2B invoices through the government's Invoice Registration Portal, which issues a unique Invoice Reference Number (IRN) and QR code.E-Way BillAn e-way bill is an electronic document required under GST for the movement of goods above a specified value, generated on the government's e-way bill portal.Input Tax Credit (ITC)Input Tax Credit (ITC) is the credit a GST-registered business can claim for the GST it paid on purchases of goods/services used for business, which it can set off against the GST it owes on sales.GSTR-1GSTR-1 is the GST return in which a registered business reports details of all its outward supplies (sales) made during a tax period.GSTR-3BGSTR-3B is a self-declared summary GST return where a registered business reports total outward and inward supplies, tax liability and input tax credit, and pays the net GST due.Reverse Charge Mechanism (RCM)Under the Reverse Charge Mechanism (RCM), the recipient of goods or services — instead of the supplier — is liable to pay GST directly to the government.Composition SchemeThe GST Composition Scheme is an optional, simplified scheme for small taxpayers to pay GST at a fixed, lower percentage of turnover instead of regular GST rates, with simpler compliance.IGST, CGST & SGSTCGST and SGST are the central and state components of GST charged on intra-state (within one state) supplies, while IGST is charged on inter-state (between two states) supplies and imports.Place of SupplyPlace of supply is the GST rule that determines the location treated as the destination of a supply, which decides whether CGST+SGST (intra-state) or IGST (inter-state) is charged.Tax InvoiceA GST tax invoice is the primary document a registered supplier issues for a taxable supply of goods or services, containing the prescribed details needed for GST compliance and the recipient's input tax credit.Credit NoteA credit note under GST is a document a supplier issues to reduce the value or tax of a previously issued invoice — for example, on a sales return, discount or invoicing error.Delivery ChallanA delivery challan is a document used under GST to accompany the movement of goods in situations where a tax invoice cannot be issued at the time of dispatch — such as supply on approval, job work or branch transfers.SAC CodeSAC (Services Accounting Code) is a 6-digit code used under GST to classify services for determining the applicable tax rate and for reporting on invoices and returns.
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