Taxblock
Quick Summary
A tax is a mandatory charge levied by the government on an individuals or a businesss hard-earned income during any financial year. While paying taxes is certain and inescapable there are various ways to diminish this burden and one such measure is tax planning. Tax planning is a process of analy
Daily Limit Reached
You have reached your daily limit of 2 Free Articles
Subscribe to CCI PRO for unlimited access
Why Upgrade to CCI PRO?
- No Ads
- WhatsApp Broadcasts
- Daily E-Newsletter
- Unlimited Articles Access
BEST VALUE
2 YEAR PLAN
3,499
(Inclusive of GST)
1 YEAR PLAN
1,999
(Inclusive of GST)
View all CCI PRO benfits
Already a PRO member? Login here for an ad-free experience.
FAQ :
Tax planning is the process of analysing your financial situation throughout the year to identify legitimate exemptions and deductions that reduce your overall tax liability.
Tax planning is important because it helps minimise litigation by ensuring timely compliance, increases productivity by directing income to beneficial tax-saving options, reduces your tax liability, and contributes to healthy economic growth.
The article mentions purposive tax planning (using tax provisions for maximum benefit), permissive tax planning (plans allowed under the Income-tax Act, like Section 80 deductions), short-term tax planning (for immediate objectives), and long-term tax planning (for long-term financial goals).
In India, you can plan your tax by calculating your estimated income, evaluating taxable aspects, claiming permissible exemptions (like HRA, LTA), and investing in tax-saving instruments for deductions under Sections 80C to 80U.
Common tax-saving investments include Public Provident Fund (PPF), Equity Linked Saving Schemes (ELSS), National Saving Certificates (NSC), 5-year bank deposits, life insurance, health insurance premiums, and home loan payments.
CAclubindia
