Query regarding planning of Income Tax

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Harsiddhi Ruparel

Harsiddhi Ruparel (Querist)
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13 January 2010 What do u mean by Income Tax Planning and Management?

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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13 January 2010 Income Tax Planning means you plan your business activities in such a way that you pay less taxes by adopting lawful means.

For example; if recently government has announced that particular area is declared as "backward" ( for tax benefits )then you can plan your industrial activities in such a way that you avail the benefits of "backward" area.

Tax Management means all the lawful procedures which are required by the law; have been duly fulfilled in time. This leads to avoidance of penalties and prosecution etc.

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CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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13 January 2010 Tax Planning- Saving the tax under the Provisions available as per the Act

Tax Management- Maintain the all procedure as per the Act

Murtaza I Bhagat

Murtaza I Bhagat (Expert)
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14 January 2010 both are usefula for helping business infront of due time and also to Plan for save tax on govt. schemes. and also not to go at the end of the year to increase the burden of tax calculation and tax savings.

Harsiddhi Ruparel

Harsiddhi Ruparel (Querist)
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16 January 2010 can u elaborate pls?... like if u can give some details... I mean a list of examples which a lay man can understand! it wud b a gr8 help!

Thx.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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16 January 2010 Tax Planning - You can avail deductions as per Sec.80C if you are availing the same is tax planning

Tax Managment- You have to file the Tax return with the due date otherwise penalty and interest will be leivable,if you are filing the tax return with in the due date is tax management

Harsiddhi Ruparel

Harsiddhi Ruparel (Querist)
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18 January 2010 ??????

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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18 January 2010 First take the two words "Planning and Management" as under:

Planning : It means you have limited resources and/or choices are more. So you have to take that decision which will give you maximum results from your resources. In planning some decision making is there.

Management : Whatever is planned is to be implemented. It also includes day-to-day management.

Without planning; no management is possible. Management is related to "implementation" of decision taken (planning made).

In Tax planning you have to focus on the action which will ultimately lead to less burden of taxation. For example; you acquire a loss making unit which leads to amalgamation with your existing unit.

In this situation you plan to reduce your tax liability because of benefit of carry forward of losses.

In Tax Management; your focus is on day-to-day fulfilment of legal requirements like filing of returns, payment of taxes and reply of notices in due time etc.

Further example; suppose you incurred loss in one of your manufacturing unit. If you don't file your return of income on or before due date; you will loose carry forward of loss. So here filing is important and is part of tax management.

We can't say that this filing is part of planning.

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