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Tax Planning

In today's complex financial and business world, everyone needs reliable, professional accountancy and taxation help managing their personal and business finances.

Not only it is necessary to ensure that everything is accounted for in compliance with the various statutory requirements, it is also important to make the most of every opportunity to maximize your income and minimize your Tax Liability by claming various exemption & deductions.

Tax planning is all about understanding the personal and business taxes you are liable to pay, and looking at ways to minimize them. In this way, you can help maximize your net income, creating opportunities to save for the current and future needs of your family and your business.

Steps in Tax Planning:
There are three steps in Tax Planning which would aid a person in making prudent tax plans to reduce their income tax liability and ensure a better tomorrow by making compulsory savings by investing in safe government schemes. These three steps in tax planning are:
  • Calculating taxable income.
  • Calculating tax payable on gross taxable income for the entire financial year.
  • To either pay the tax without tax planning or minimize tax through planning.
Deductions from Taxable Income:
Tax payers can avail themselves of tax incentives as furnished by the government and while making tax planning the exemptions should be taken to consideration. The exemptions are:
  • Deduction under Section 80C - This section has been introduced from the FY 2005-06, under which a deduction of up to Rs. 1,00,000 is allowed from taxable income by investing in some specified schemes.
  • Deduction under Section 80 CCC(1) - This section allows a deduction of up to Rs. 10,000 to an individual for making contribution to pension schemes.
  • Deduction under Section 80D - This section allows a deduction up to Rs 10,000 for paying the premium for health insurance policy.
 
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