Gratuity is a sum of money paid by an employer to an employee for services rendered in the company. However, gratuity is paid only to employees who complete 5 or more years with the company. It can be understood as a form of tip paid by employer to the employee for services offered in the company. Any employee under the state government, central government or local authority receives gratuity amount than the amount is fully exempt from Income Tax.

The starting of an assessment year is counted from 1st April. Hence the previous year of a newly started business would be date of commencement of the business and 31st March of the following year.

Salary income is a taxable income. The salary received by the manager of an agricultural farm is a salary income.

Assessment year is a 12 months period which commences on the 1st day of April every year. It is usually the beginning of a new financial year. 

Previous year means the financial year preceding the current assessment year. For example, 2017 is the previous year for the current financial year. 

Assessment Year is the year in which one file income tax returns of the year prior to it (i.e. Financial Year). It is the year in which the income that one has earned in the financial year that is just ended is evaluated. Tax is calculated and compared with the amount paid and assessment order is issued.

Deduction under section 80D is available to an individual or a HUF. A deduction of Rs. 25,000 can be claimed for insurance of self, spouse and dependent children. An additional deduction for insurance of parents is available to the extent of Rs 25,000 if they are less than 60 years of age or Rs 50,000 (has been increased in Budget 2018 from Rs 30,000) if parents are more than 60 years old. In case, a taxpayers age and parents age is 60 years or above, the maximum deduction available under this section is to the extent of Rs. 100,000. Example: Rohan’s age is 65 and his father’s age is 90. In this case, the maximum deduction Rohan can claim under section 80D is Rs. 100,000. From FY 2015-16 a cumulative additional deduction of Rs. 5,000 is allowed for the preventive health check up to individuals. 

Section 80EE allows tax benefits for first time home buyers. Income tax deduction can be claimed on home loan interest towards your first house property. The deduction allowed under this section is for interest paid on home loan up to maximum Rs 50,000 per financial year. 

A direct tax is paid by a person upon whom it is legally imposed; its effect is borne by the tax payer, for example, income tax. A direct tax is demanded from the very person who it is intended or devised for.  An example of a direct tax is wealth tax.

In CENVAT, one basic excise duty of 16% is applicable to all goods. CENVAT stands for Central Value Added Tax.