Tax planning can be defined as the way of analysing, planning and optimising a person’s financial situation from a tax saving or tax Efficiency point of view. Tax planning helps you to make the most out of the different tax exemptions and deductions that are available to reduce your tax duty in the financial year.
Taxes in India consume a considerable portion of your earnings. Without proper tax planning, this compulsory contribution can eat a large bite of your hard-earned money. Fortunately, there are tools available to help you reduce tax liability. However, what does it include and how can you go about it? We’re here to explain tax planning.
Tax planning refers to financial planning for tax efficiency. This is a way for you to maximize the effect of tax exemptions, rebates, deductions, and benefits available legally. Broadly, tax planning includes formulating financial and business decisions to minimize the income tax you owe the government in the best way.
In layman’s terms, tax planning is simply a means to save money by investing in tax-saving instruments under different sections of the Income Tax Act, 1962. It requires one to plan their finances and taxes at the beginning of the fiscal year, instead of leaving it to the last month, week, day or hour. Tax planning for every individual is dependent on subjective factors that include age, income, financial goals & one’s risk appetite.
Tax planning, if done precisely under the framework defined by the taxation authorities, is a legally smart decision.
Our suggestions are based on your income tax slab, lifestyle choices, and social liabilities.
At GoForSIP Financial Services, we thoroughly understand your needs, portfolio and recommend the best insurance plans for your needs. Get connected with one of our tax consultants now!
Tax planning involves analyzing and optimizing your financial situation from a tax-saving or tax efficiency perspective. It helps individuals make the most of available tax exemptions and deductions to reduce their tax liability in a given financial year. Proper tax planning is essential to ensure you don’t pay more taxes than necessary and retain more of your hard-earned money.
Tax planning allows you to strategically utilize tax-saving instruments, exemptions, rebates, and deductions provided by the Income Tax Act to legally minimize your tax burden. By understanding and leveraging these provisions, you can potentially lower the amount of tax you owe to the government.
Tax planning should ideally be done at the beginning of the fiscal year to effectively plan your finances and investments. Procrastinating until the last moment may lead to missed opportunities for maximizing tax benefits.
At GoForSIP Financial Services, we have tax consultants who understand your unique financial needs and goals. Based on your income tax slab, lifestyle choices, and social liabilities, we provide personalized tax planning suggestions and strategies to help you save on taxes effectively.