Glossary
Plain-language definitions, linked from every calculator that uses the term.
C
- CAGR
- Compound Annual Growth Rate — the smoothed, constant annual rate that would take an investment from its initial value to its final value over a given period.
- Capital Gains
- Profit made from selling a capital asset (stocks, mutual funds, property, etc.), taxed differently depending on the asset type and how long it was held.
- CTC
- Cost to Company — the total annual cost an employer bears for an employee, including salary, employer PF, gratuity provisioning, and other benefits — not the same as take-home pay.
E
- EMI
- Equated Monthly Installment — the fixed monthly payment on a loan, covering both principal and interest, that fully repays the loan over its tenure.
G
- Gratuity
- A statutory lump-sum benefit paid by an employer to an employee on leaving after 5+ years of continuous service, calculated under the Payment of Gratuity Act, 1972.
H
- HRA
- House Rent Allowance — a salary component that is partially or fully tax-exempt under Section 10(13A) if you pay rent, based on a formula involving your salary, HRA, and rent paid.
L
- LTV (Loan-to-Value)
- The loan amount expressed as a percentage of the asset's value being financed — e.g., an ₹80 lakh loan on a ₹1 crore property is an 80% LTV.
N
- New Tax Regime
- The default income tax structure with lower slab rates and a larger standard deduction, but very few other deductions or exemptions available.
- NPS
- National Pension System — a government-regulated, market-linked retirement scheme where a portion of the corpus must be annuitized at retirement.
O
- Old Tax Regime
- The income tax structure allowing deductions like 80C, HRA, and home loan interest, in exchange for relatively higher slab rates.
P
- PPF
- Public Provident Fund — a government-backed, long-term savings scheme with a 15-year lock-in, offering EEE (fully tax-exempt) status on contribution, interest, and maturity.
S
- Section 80C
- An income tax deduction (Old Regime only) of up to ₹1,50,000/year for specified investments and expenses — PF, ELSS, life insurance premiums, principal repayment on a home loan, and more.
- SIP
- Systematic Investment Plan — investing a fixed amount into a mutual fund at regular intervals, usually monthly, instead of a lump sum.
T
- TDS
- Tax Deducted at Source — tax the payer (e.g., your employer or bank) deducts and deposits with the government before paying you, adjusted against your final tax liability.
X
- XIRR
- Extended Internal Rate of Return — like CAGR, but accounts for multiple cash flows made on different dates (e.g., SIP installments), weighting each by exactly when it happened.