Indulgence

In Roman Catholicism, an indulgence is a means by which a person takes away some of the temporal punishment due his sins.  Indulgences are for those who have committed sins that do not remove justying grace.  In other words, these lesser sins, venial sins, have their temporal punishments due to the person either in this life or the next life in purgatory.  Indulgences removed the temporal punishment due those sins.

So indulgences remove the temporal punishment due to venial sins, penance restores the sanctifying grace lost by committing a mortal sin.

There are two main types of indulgences:  Partial and Plenary.  A partial indulgence removes part of the punishment of sins.  A plenary indulgence removes all of the punishment of sins.