A good citizen should always pay tax. A smart citizen is the one who pays tax but also makesmaximum use of the provisions available in Tax Laws to minimize the tax liability.
Tax Planning involves planning in order to avail all exemptions, deductions and rebates provided in the law. The Income Tax law itself provides for various methods for Tax Planning, It provides exemptions u/s 10, deductions u/s 80C to 80U and rebates and reliefs.
Through proper tax planning, you will not only lower amounts of tax payments with respect to basic taxes, but you'll also create a wealth stream for achieving long term goals. Optimization of tax payments includes:
- Examination of the tax saving schemes available
- Shortlisting the most suitable schemes for your benefit
- Expert opinions on taxation problems
Connection between Financial Planning and Tax PlanningTax planning and financial planning are closely linked, because taxes are a large expense item as you go through life. So planning to reduce taxes is a critically important piece of the overall financial planning process.