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Introduction

Tax Planning is an exercise undertaken to minimize tax liability through the best use of all available allowances, deductions, exclusions, exemptions, etc., to reduce income and/or capital gains.

The purpose of tax planning is to discover how to accomplish all of the other elements of a financial plan in the most tax-efficient manner possible. Tax planning thus allows the other elements of a financial plan to interact more effectively by minimizing tax liability.

Tax Planning involves planning in order to avail all exemptions, deductions and rebates provided in Act. The Income Tax law itself provides for various methods for Tax Planning. Generally it is provided under exemptions u/s 10, deductions u/s 80C to 80U and rebates and reliefs.

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Objective of Tax Planning

As you know, in this world, nothing is certain except death and taxes. As a good citizen, you have to abide by the tax laws of the land. As a hard-working person, it is not how much income you earn that matters, but what you get after taxes. Income taxes, if not planned well, can take away a major portion of your income. Similarly, as an investor, you must understand the difference between pre-tax returns and post-tax returns.

You may already be buying insurance or investing in instruments with the sole objective of saving taxes. Tax Planning is more than that. It is about minimizing taxes through tax-saving instruments and also making sure that those instruments are suitable to meet your financial goals. In fact, meeting goals becomes primary objective and saving taxes becomes secondary objective.

Tax Planning is in fact a part of Financial Planning. It is a process, not a product. This process involves:

  • Collect the data about your income from all sources
  • Analyze the data for taxable and tax-exempt incomes
  • Account for existing tax saving instruments towards deductions and rebates
  • Calculate the possible amount to invest in tax-saving instruments and assign    them to financial goals.

The outcome of Tax Planning process is a 'Tax Plan' document. This document spells out the details on tax saving instruments you must buy to comply with your taxes. If you follow it, you are availing all the tax incentives provided by the government to meet your financial goals.

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How We Can Assist You

We provide tax-planning services in association with our empanelled auditors that enable you to limit your personal and future tax liabilities. Although, this is a part of our 'Financial Planning' service, we also offer it as a stand-alone service. This is a fee-based service using which we can design and deliver a Tax Plan to you.

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