Tax planning is the analyzing one’s financial position in the present & in the future so as to plan one’s finances in such a way that it leads to tax saving
Tax planning allows a taxpayer to make the best use of the various tax exemptions, deductions and benefits to minimize their taxes over a financial year
TAX PLANNING IN INDIA:
In India, there is a number of tax saving options for all taxpayers. The deductions are available from Sections 80C through to 80U and can be claimed by taxpayers eligible for those exemptions
There are various other sections under the Income Tax Act, 1961 that can reduce your tax liabilities such as exemptions and tax credits.
CORPORATE TAX LIABILITIES
Corporate tax planning means reducing tax liabilities on a registered company.
The common ways to do this includes reducing income by showing expenses on business transport, health insurance of employees, office expenses, retirement planning, child care, charitable contributions etc.
Through the various tax deductions and exemptions provided under the Income Tax Act, a company can substantially reduce its tax burden in a legal way
- Purposive tax planning:Planning taxes with a particular purpose
- Permissive tax planning:Tax planning that is under the framework of law
- Long range and Short range tax planning: Planning done at the start and end of a year respectively
- Reduction in overall taxes to be paid
- Stability of income
- Growth of economy by paying regular taxes
- reducing chances of any inquiry against us