Income Tax Glossary: Form 16, 26AS, TAN, PAN and Other Terms Explained

Tax forms and notices are full of terms nobody explains up front. Here’s a plain-English reference for the ones you’ll actually run into while filing.

PAN (Permanent Account Number)

Your 10-character tax ID, issued once and used for life across every financial transaction — filing returns, opening bank accounts, buying property above a threshold, and more.

TAN (Tax Deduction and Collection Account Number)

A separate number required by anyone who deducts TDS — employers, banks, tenants paying high rent, and businesses. If you only earn income, you need a PAN; if you also deduct tax from payments to others, you need a TAN too.

Form 16

Issued by your employer, this certifies the salary TDS deducted through the year. By law it must reach you by 15 June following the financial year.

Form 26AS

Your consolidated tax credit statement on the e-filing portal — every TDS, TCS, advance tax payment and refund recorded against your PAN, from every deductor, not just your employer.

AIS (Annual Information Statement)

A much broader financial summary than Form 26AS — bank interest, dividends, mutual fund and share transactions, and foreign remittances, pulled from banks and other reporting entities.

ITR (Income Tax Return)

The annual form (ITR-1 through ITR-7, depending on your income sources) you file to report income, claim deductions and settle or reclaim tax for the year.

Tax Year (formerly Previous Year / Assessment Year)

Under the Income-tax Act, 2025, the old two-term system — the year you earned the income (“Previous Year”) and the year you file and it gets assessed (“Assessment Year”) — is merged into a single Tax Year, running 1 April to 31 March.

Gross Total Income vs Total Income

Gross Total Income is the sum of income from all heads (salary, house property, business, capital gains, other sources) before any deductions. Subtract your Chapter VI-A deductions (80C, 80D, etc.) and you get Total Income — the figure your tax is actually calculated on.

Standard Deduction

A flat deduction for salaried individuals and pensioners with no bills or proof needed — ₹75,000 under the new regime, ₹50,000 under the old regime, for FY 2025-26.

Rebate (Section 87A)

A rebate that wipes out your tax entirely below a certain income — up to ₹12 lakh under the new regime for FY 2025-26. It’s applied after computing tax on slabs, not a deduction from your income.

Surcharge

An extra charge on your tax itself (not your income) once total income crosses ₹50 lakh — rising in steps up to 25% (new regime) or 37% (old regime) at the highest income levels.

Health & Education Cess

A flat 4% added on top of your tax plus surcharge, earmarked for health and education spending — applies to every taxpayer, at every income level.

Advance Tax

Tax paid in instalments during the year rather than as a lump sum after year-end, required once your net tax liability (after TDS) is ₹10,000 or more.

TDS vs TCS

TDS (Tax Deducted at Source) is withheld by whoever pays you — an employer, bank or tenant. TCS (Tax Collected at Source) is the mirror image — collected by a seller from a buyer, common on high-value goods, foreign remittances and e-commerce sales.

Challan (e.g. Challan 280)

The formal receipt/payment form used to deposit tax with the government — self-assessment tax, advance tax or regular assessment dues are all paid via a challan, generated and paid online through the tax portal or authorised banks.

Run into a term that isn’t here, or want to see how these actually apply to your income? Use our Income Tax Calculator, or ask CA Aman directly.