Financial terms & full forms glossary

Investing a fixed amount into a mutual fund every month instead of all at once, so your investment builds gradually alongside your income.

The constant annual rate that would take an investment from its beginning value to its ending value, smoothed evenly across every year in between.

The annualised return for a series of cash flows that happen on irregular dates and in irregular amounts, unlike CAGR, which only works for a single beginning and ending value.

Withdrawing a set amount from your investment every month while the rest of your corpus stays invested and keeps growing. The mirror image of a SIP.

A tax-saving mutual fund with just a 3-year lock-in, far shorter than PPF's 15 years or EPF's till-retirement horizon, that qualifies for a Section 80C deduction.

The price you buy or sell mutual fund units at on a given day. Your return comes from the NAV moving, not from any rupee amount changing directly.

The mutual fund payout option formerly called "Dividend." A payout makes the fund's NAV visibly drop overnight, but it's your own money coming back out, not extra profit.

Parking a lumpsum in a low-volatility fund and transferring a fixed amount into an equity fund over time, a bridge between a one-time lumpsum and a regular SIP.

The fixed amount you pay your lender every month until a loan is fully repaid, covering both a principal component and an interest component.

The cap lenders place on your total EMI obligations, existing loans plus the new one, as a fixed percentage of your income, when deciding your loan eligibility.

How the government collects tax as income is paid rather than waiting for you to file months later: whoever pays you withholds a percentage and deposits it on your behalf.

A salary component whose tax-exempt portion is capped by three separate limits: whichever of them is smallest is what you actually get to exclude from tax.

A single indirect tax applied at every stage of the supply chain, replacing a tangle of older taxes like VAT, service tax, and excise duty.

Within a single state, GST splits evenly into CGST and SGST, each exactly half the rate. Across state lines, the full amount is instead charged as one tax, IGST.

Gains on an asset held beyond the long-term threshold: over 1 year for listed equity (Section 112A), over 2 years for most other assets like property (Section 112).

Gains on an asset sold before the long-term threshold: taxed at a flat rate for listed equity (Section 111A), or at your slab rate for most other assets like property.

A government-backed, long-term savings scheme with a 15-year lock-in and a quarterly-revised, tax-free interest rate.

Both you and your employer put in 12% of your basic salary each month, though 8.33% of the employer's share (capped at a ₹15,000 wage ceiling) is diverted to EPS instead.

A genuinely separate pot from EPF, funded by 8.33% of the employer's PF contribution, that eventually pays a monthly pension after retirement instead of a lump sum.

A retirement account that grows through your own contributions invested across equity, corporate debt, and government securities, not a fixed government rate like PPF or EPF.

A deposit that locks in a rate for a set tenure with no market risk. Every rupee of interest is taxed at your full slab rate, with TDS withheld once it crosses a threshold.

A way to build up a lump sum through fixed monthly instalments instead of one upfront deposit, with the interest compounding quarterly, not monthly.

A government-backed savings scheme for a girl child's future education or marriage expenses, offering one of the highest guaranteed rates among small savings schemes.

Everything your employer spends on you in a year, including money you never actually see month to month, like the employer's own PF contribution and a gratuity provision.

The standard Indian way of quoting an annual salary or CTC in lakhs, e.g. "12 LPA" means a ₹12,00,000 annual package.

The point where your investments generate enough income to cover your living expenses for good, so working becomes optional rather than necessary.

A government-backed scheme where you pick a guaranteed monthly pension (₹1,000 to ₹5,000) and pay a fixed contribution set by your age at entry, unlike NPS or EPF.