We Know the Art of Saving Tax

Tax planning is an important aspect of personal finance that every Indian taxpayer should be aware of. Financial planning involves managing finances in a way that minimises tax liabilities. This is achieved by utilising various tax-saving strategies and legal provisions to reduce the amount of taxes payable to the government. Here, we are going to discuss what tax planning is, why it is important for Indian assesses, and the different types of investment planning strategies that can be used in India.

Tax planning is the process of managing financial affairs in a manner that reduces tax liabilities. It involves analysing an individual's financial situation, income sources, and expenses, and then taking appropriate steps to minimise the tax burden. Financial planning helps individuals or businesses to make informed financial decisions that maximise tax savings while staying compliant with the law.

Tax Preparation Services are legal and ethical, and it is not the same as tax evasion, which is illegal. Tax evasion involves deliberately concealing income, misrepresenting deductions or credits, or not reporting taxable income to avoid paying taxes. Tax planning, on the other hand, is a legitimate way of managing tax liabilities by using legal provisions, deductions, and exemptions provided by the tax laws.

To minimise Tax Amount - Obviously every person who has hard earned money does not want to pay it as tax and wants to reduce the tax liability.

To ensure economic stability - Your contribution towards the nation in the form of taxes helps in building a strong economy. So pay Tax wisely.

Diversify Portfolio - Making Financial planning and routing money to different investment channels helps in making a diverse portfolio of assessees.

You can also achieve all these benefits by getting online tax consultant from India’s leading tax consultancy firm. You just simply search ca for tax planning you will end up by finding us.

In India, taxes are an important source of revenue for the government. Taxes are levied on various sources of income, including salaries, business income, capital gains, and dividends. Failure to plan taxes can result in paying more taxes than necessary, which can impact an individual's financial goals and objectives. Here are some basic advantages of Tax Planning by Indian Assesses-

To minimise Tax Amount - Obviously every person who has hard earned money does not want to pay it as tax and wants to reduce the tax liability.

To ensure economic stability - Your contribution towards the nation in the form of taxes helps in building a strong economy. So pay Tax wisely.

Diversify Portfolio - Making Financial planning and routing money to different investment channels helps in making a diverse portfolio of assessees.

You can also achieve all these benefits by getting online tax consultant from India's leading tax consultancy firm. You just simply search ca for tax planning you will end up by finding us.

There are different types of tax planning strategies that Indian assesses can use to reduce their tax liabilities. These strategies depend on various factors, such as the source of income, type of business, and tax laws of the country. Let us discuss the most common types of tax preparation service strategies in India which are suggested by tax consultants in India.

Following are some of the methods of Financial planning recommended by tax consultants:

1. Short-range tax planning Method

   Here a person seeks for a short and quick option for their tax savings. Usually at the end of the year assesses find some option under which they can invest. This type of investment practice requires an instant amount to be invested for saving tax. No long term commitment is there under the short term planning method. This kind of investment creates minimal and small impact on your salary.
   Examples - It includes SIP, ELSS mutual Funds and some pension schemes.

2. Long-term tax planning Method

   Long term plans are usually for those persons who are looking for multi year investments. Here you have to pay a sum every month/quarters/years. And this kind of investment is consistent and people have to make it throughout the period.
   Examples - Investment is monthly SIP, PPF, Pension schemes, etc.

3. Permissive tax planning

   Under permissive tax planning, a person seeks for maximum tax saving benefits not only at the time of investment but also at the time of completion of plan. For example if you started investment this year, during the period of investment you will save tax on income and after the maturity of the plan you will get an amount that also shal;l be considered tax free. So here you are trying to attain maximum tax benefit limits. Or you took loans and made its repayment and under this situation you are getting various benefits in terms of interest you are paying.
   Examples - Various mutual fund plans, Repaying education loan, repaying home loan, etc.

4. Purposive tax planning

   If you are planning a very specific investment planning to attain a specific goal, it comes under purposive investment planning. Under this kind of investment you are focusing on specific tax relief. Under this investment planning you select some tax saving plans which are suitable to your goals.
   These were some tax preparation services which is most common in India and can be ended up by finding ca for tax planning through Legal Pillers. Taking financial advice from a tax consultancy firm will surely help you in saving taxes.

Here we are bifurcating some common expenses and investment to be considered as tax saving options. Getting financial advice for all these options helps you tremendously.

Common Expenses Considered for Investment -

• Life Insurance Premium - Section 80C
• Health Insurance / Mediclaim Premium - Section 80D
• Medical expenses for specified diseases - Section 80DDB
• Children's Tuition Fees - Section 80C
• Donations to specified institutions and trusts - Section 80G
• Medical expenses for specified diseases - Section 80DDB
• Home loan principal repayment - Section 80C
• Home loan interest repayments - Section 24
• Education Loan interest repayment - Section 80E

Common Investment Considered for Investment -

• Equity Linked Savings Scheme (ELSS) mutual fund
• Unit Linked Insurance Plans (ULIPs)
• Public Provident Fund (PPF)
• National Savings Certificate (NSC)
• National Pension System (NPS)
• Tax Saver FD (5 year tenure)
• Sukanya Samriddhi Yojana
• Employee Provident Fund
• Voluntary Provident Fund