Tax Glossary
Plain-English definitions for 24 key tax terms. Covers income tax concepts across the US, UK, India, Canada, Australia, New Zealand, Ireland, Singapore, and South Africa.
Core Concepts
- Capital Gains Tax Capital gains tax (CGT) is the tax on profit from selling an asset like shares or property…
- Effective Tax Rate The effective tax rate is the actual percentage of your total income paid in tax. It is al…
- Fiscal Drag Fiscal drag (bracket creep) occurs when inflation pushes wages into higher tax brackets wi…
- GST and VAT GST (Goods and Services Tax) and VAT (Value Added Tax) are consumption taxes charged at ea…
- Marginal Tax Rate The marginal tax rate is the percentage of tax applied to your next dollar of income. Lear…
- RSU Taxation RSUs (Restricted Stock Units) are taxed as ordinary income when they vest. Learn how RSU t…
- Take-Home Pay Take-home pay is your net income after all taxes and mandatory deductions. Learn what redu…
- Tax Bracket A tax bracket is a range of income taxed at a specific rate in a progressive tax system. O…
- Tax Credits vs Tax Deductions A tax credit reduces your tax bill dollar-for-dollar. A tax deduction reduces your taxable…
- Tax Year The tax year is the 12-month period used for calculating income tax. It varies by country …
- Withholding Tax Withholding tax is tax deducted at source before income reaches you — from your salary, di…
US Terms
UK Terms
- ISA Allowance The ISA allowance is the annual amount you can save in a UK Individual Savings Account tax…
- National Insurance National Insurance (NI) is the UK's payroll contribution system funding state pension, NHS…
- Personal Allowance The personal allowance is the amount of income you can earn before paying income tax. In t…
India Terms
- Section 80C Section 80C of India's Income Tax Act allows deductions up to ₹1,50,000 per year on eligib…
- Section 87A Tax Rebate Section 87A provides a tax rebate making income up to ₹7,00,000 (new regime) effectively t…
- TDS (Tax Deducted at Source) TDS is India's withholding tax system where payers deduct tax before releasing payment. It…
Australia Terms
International
- Double Taxation Agreement A DTA is a treaty preventing the same income from being taxed twice by two countries. Lear…
- Expat Tax Expat tax refers to the tax obligations of individuals living or working outside their hom…
- Tax Residency Tax residency determines which country has the right to tax your worldwide income. Learn t…
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