The Union Budget 2017 is just round the corner. To make things easier, The Union Cabinet minister has prepared a budget glossary. The Finance Minister will be drafting table of contents for 10-12 important topics. Presenting you with Union Budget 2017 glossary Annual Financial Statement or AFS Annual Financial Statement is shortly abbreviated as AFS. This statement contains an overall summary of receipts and expenditure of the country during the financial year starting April 1, ending March 31. AFS is divided into three main components: a) Consolidated Fund b) Contingency Fund and c) Public Account Consolidated Fund Consolidated Fund is the most important fund of the Government of India. The consolidated fund of India includes the funds borrowed and the funds received from the given loans. Contingency Fund Any unforeseen or unexpected fund is met from the amount contained in the Contingency Fund Account. The President would have complete access to 500 crores maintained on the Contingency account. The amount can be dispersed during an emergency or a crisis situation. Public Account Public account is a domain where the government merely acts as a banker and they are the Public Provident Fund (PPF), EPF (Employee 's Provident Fund), Post Office Savings. The amount cumulating on the Public account has to be paid to the respective owners. Revenue Receipts Taxes are the most important revenue receipts for the government of India. These are receipts that do not entail sale or creation of assets. Revenue Expenditure Expenses that do not result in sale of products or creation of assets fall under the category of Revenue Expenditure. Salaries, interest paid out on government bonds and subsidies are some of the most important components that fall under the category of Revenue Expenditure. Capital receipts/ expenditure Any receipts or expenses incurred by the government by liquidating or creating an asset fall under the gamut of capital receipts or expenditure. If the government sells shares in public sector companies, just like how it did in case of Maruthi, the sale proceeds would go into the Capital Receipts account. On the other hand, if the government gives loans to borrowers, it disburses a certain amount of capital from its reserves to dispense money to the needy. The borrowers have to re-pay the loan at the interest-rate fixed by the government. This falls under the category of Capital expenditure. Corporation tax Now we move on to discussing some of the more important terms used in Budget. Corporation tax is the tax invoked on the profits of companies. Taxes on income other than corporation tax When individuals or non-corporate assesses pay taxes for the income earned by them, these are non-corporate taxes. Fringe tax benefit When tax is levied on the employee for the perquisites or fringe benefits enjoyed by him/her as given by the employer, the tax becomes a Fringe Tax benefit. Securities Transaction tax or STT When an investor sells his shares, bonds or property, the sale results in either a profit or a loss. Based on the time duration for which the asset is held, it can be categorized as long term or short-term capital gain or loss. STT is therefore a kind of a turn-over tax wherein small tax has to be paid by the investor which is calculated on the total consideration paid or received. Customs We have to pay duty taxes for the raw-materials that are imported from overseas countries. Customs duty tax is an important component levied by the government of India, to promote the growth of industries. Union Excise duty Duties imposed on Goods made in India. Service tax When we attain a service from a merchant establishment or from a company, we are liable to pay Service tax. Direct taxes When the burden of tax directly falls on the person on whom it is levied, it becomes a direct tax. Income tax on individuals and corporates, STT, and BCTT are examples of direct taxes. Indirect taxes These are taxes that do not directly fall on the person who pays the tax. These are taxes on expenditure and include Customs, excise and service tax. Non-tax Revenue When the Govt. receives revenue through interest payments (received on loans given by the government to states, railways and others) and via dividends and profits received from Public Sector companies, then it is a perfect example of non-tax revenue. Police, medical services, NGO 's, power and railways also yield sizeable amount of revenue for the government. Grants in Aid or contributions When assesses or citizens of India contribute generously to the welfare measures initiated by the government or during the case of an emergency crisis situation, the government considers these receipts or transfers as grants in aid or contributions. The government has no obligation to repay the same. Five Year Plan Five Year Plan is otherwise known as a Central plan broken down into annual installments. Through these plans, the government strives to achieve its objectives over a 'five year ' period. Plan Expenditure This is usually a statement or a plan that the government prepares during the onset of the budget. It comprises of the funds that need to be allocated to Central, State and Union Territories. Each state would present its budget to the Central ministry for carrying out its activities. The cities, towns, taluks, sub-panchayats and villages will need source of funds for replenishment. Fiscal Deficit When the government 's non-borrowed funds exceed its entire expenditure, it has to borrow money from the public to meet the short-fall. Excess of total expenditure over total non-borrowed receipts is called a fiscal deficit. Primary Deficit Government will have to pay interest on the earlier borrowings as well. The primary deficit is fiscal deficit less interest payments. Value Added tax or VAT You have to pay VAT or Value Added Tax for enhanced products or fine-line services provided to you by the government. The differential tax between the value of input and output required to produce a good/service is how a VAT is calculated. CESS CESS is over and above the basic liability of the government where it is used to meet specific expenditure. For example, both individual as well as corporate income is liable to education CESS of 2 %. Surcharge Surcharge is an additional charge or tax. When the government imposes a surcharge of 10 % on a taxable scale of 30 %, your tax obligation to the government falls at 33 %. These are some of most important terms used in Budget. You can easily understand Union Budget 2017 glossary with the explanation rendered. Tune into the latest news updates to catch up budget basis reviews.