Legal & Financial Jargon Dictionary
We translate confusing court and tax terminology into simple everyday Hindi and English family stories. Say goodbye to legal intimidation!
CAGR (Compounded Annual Growth Rate)
The smooth, average rate at which an investment grows each year over a multi-year period, taking compounding into account.
"If ₹1 Lakh grows to ₹2 Lakhs in 6 years, your CAGR is approximately 12.2% per year."
Class I Heirs
The first category of immediate legal heirs under Hindu law who have the highest priority in inheriting property.
"Spouse, sons, daughters, and mother are all Class I heirs and share the property equally."
Class II Heirs
The secondary category of relatives (like father, brothers, sisters, grandparents) who only inherit if ZERO Class I heirs exist.
"Because the deceased bachelor had no wife, children, or mother, his property went to his Father (Class II Category I heir)."
Codicil
A formal written document used to make minor additions or changes to an existing Will without rewriting the whole thing.
"When his new grandson was born, grandfather added a Codicil to his Will leaving ₹5 Lakhs for the baby's education."
Coparcener
A person who acquires an equal birthright in ancestral family property the moment they are born.
"Since the 2005 law change, Priya is a Coparcener in her grandfather's ancestral farm just like her brother Rahul."
EMI (Equated Monthly Installment)
The fixed amount you pay to the bank every month to repay your loan, comprising both principal repayment and monthly interest.
"For a ₹5 Lakh personal loan at 11% for 3 years, your monthly EMI is ₹16,369."
Executor
The trusted person appointed in a Will to carry out the deceased's wishes and distribute property.
"Father named his reliable CA friend as the Executor of his Will to ensure smooth distribution between his sons."
Foreclosure Fee
A penalty charged by some lenders if you pay off and close your entire personal loan before the agreed tenure ends.
"Closing a fixed-rate loan after 1 year may incur a 2% to 4% foreclosure charge on the remaining balance."
Indemnity Bond
A signed guarantee promising to compensate the bank or company if any false claim or dispute arises later.
"To withdraw ₹8 Lakhs from her late mother's bank account without court certificate, Priya submitted an Indemnity Bond to the branch manager."
Indexation
Adjusting the original purchase price of property for inflation over the years using government Cost Inflation Index (CII) to reduce capital gains tax.
"Thanks to Indexation, the taxable capital gains on selling the flat bought by father in 2002 was reduced from ₹50 Lakhs to just ₹15 Lakhs!"
Inflation Drag
Money losing value over time due to rising prices of goods and services.
"If your savings account earns 3% interest while inflation is 6%, your real buying power is shrinking by 3% every year."
Intestate
When a person dies without leaving a valid, signed Will.
"Mr. Ramesh passed away suddenly without writing a Will. His bank account and flat will now be divided among his wife and children under Intestate succession rules."
Karta
The senior-most male or female member who acts as the manager and head of a Hindu Undivided Family (HUF).
"After the father's demise, the eldest daughter became the Karta of the family HUF business."
Legal Heir Certificate
A basic government certificate issued by Tehsildar/Revenue officer listing surviving family members.
"Sunita used her Legal Heir Certificate to transfer her late husband's electricity meter and LPG gas connection to her name."
Loan Prepayment
Paying extra money toward your loan principal ahead of schedule, which reduces your total interest burden and shortens loan duration.
"Paying an extra ₹3,000 every month on a ₹5 Lakh loan reduces your loan duration by 8 months and saves ₹32,000 in interest."
Lock-in Period
A mandatory minimum time during which you cannot withdraw or break your investment without penalties.
"PPF has a 15-year lock-in period (with partial withdrawals allowed after 6 years), whereas ELSS mutual funds have a 3-year lock-in."
Mutation
The process of updating the title owner's name in local municipal or land revenue government records after buying or inheriting property.
"After getting the flat through her father's Will, Meena applied for Mutation at the Municipal Corporation to get property tax bills in her name."
Probate
Official court certificate confirming that a Will is genuine and valid.
"Because Uncle Suresh owned a flat in South Mumbai, his children had to get Probate from the Bombay High Court before selling it."
Processing Fee & 18% GST
A one-time upfront administrative fee charged by lenders (usually 0.5% to 2.5% of loan amount) plus mandatory 18% Government GST.
"On a ₹5 Lakh loan with a 1.5% fee (₹7,500) + 18% GST (₹1,350), ₹8,850 is deducted, so you receive ₹4,91,150 in your bank account."
Reducing Balance Rate vs Flat Rate
Reducing balance interest is calculated only on the remaining balance you owe, whereas flat rate charges interest on the full original loan amount forever.
"An 11% reducing rate personal loan is much cheaper than a 7.5% flat rate loan. Always insist on reducing balance rate!"
Relinquishment Deed
A legal deed where one co-heir gives up their share in an inherited property in favor of another sibling or co-owner.
"The two sisters signed a registered Relinquishment Deed giving up their shares in the parental house so their brother could own it completely."
Savings Velocity
How fast your total savings and monthly investments are growing over time.
"Increasing your monthly contribution from ₹5,000 to ₹10,000 doubles your savings velocity and cuts your time to reach your goal in half."
Sovereign Guarantee
A 100% safety guarantee backed directly by the Government of India, meaning zero risk of losing your principal or interest.
"Post Office schemes like PPF, NSC, and SCSS carry a Sovereign Guarantee, making them safer than commercial bank fixed deposits."
Sovereign Yield Pickup
Extra safe return earned by shifting money into Government-backed high-yield savings schemes.
"Moving money from a 3.5% regular savings account to an 8.2% Senior Citizens Savings Scheme gives you a +4.7% extra safe return with zero risk."
Stridhan
All gifts, jewelry, money, and property given to a woman by parents, husband, or relatives before, during, or after marriage.
"The 500 grams of gold necklace given by her parents at her wedding is Anita's exclusive Stridhan, and she is the 100% absolute owner."
Succession Certificate
A civil court document authorizing legal heirs to collect debts, bank balances, mutual funds, and shares of a deceased person.
"To claim ₹25 Lakhs lying in their deceased father's Demat account without nomination, the siblings applied for a Succession Certificate in District Court."
Superannuation
Retirement upon reaching the official workplace age limit (usually age 58 or 60).
"Upon reaching superannuation at age 60, Mr. Sharma received his full Provident Fund balance and leave encashment payout tax-free."
SWP (Systematic Withdrawal Plan)
A feature allowing you to automatically withdraw a fixed sum of money every month from your accumulated corpus to create a regular monthly income.
"At retirement, withdrawing ₹50,000 per month via SWP from a ₹1 Crore corpus generates monthly pension while keeping the remaining principal invested."
Tax Drag
The reduction in your total investment growth caused by paying income tax on interest earned.
"A 7.5% bank FD drops to 5.25% post-tax in the 30% tax bracket, whereas a tax-free PPF keeps the full 7.10% without any tax loss."
Testator
The person who makes and signs the Will.
"As the Testator, grandfather clearly wrote that his house should go to his granddaughter."