Proper tax planning is a basic duty of every person which should be carried out religiously. Basically, there are three steps in tax planning exercise. They are as follows:
- Calculate your taxable income under all heads i.e. Income from Salary, House Property, Business & Profession, Capital Gains and Income from other Sources.
- Calculate tax payable on gross taxable income for whole financial year (i.e. from 1st April to 31st March) using a simple tax rate table, given on next page.
- After you have calculated the amount of your tax liability. You have two options to choose from:
A) Pay your taxes
B) Minimize the amount of tax you pay with prudent tax planning.
Most people rightly choose Option 'B'. Here you have to compare the advantages of several tax saving schemes and depending upon your age, social liabilities, tax slabs and personal preferences, decide upon a right mix of investments, which shall reduce your tax liability to zero or the minimum possible.
Every citizen has a fundamental right to avail all the tax incentives provided by the Government. Therefore, through prudent tax planning not only income-tax liability is reduced but also a better future is ensured due to compulsory savings in highly safe Government schemes. We sincerely advise all our readers and clients to plan their investments in such a way, that the post-tax yield is the highest possible keeping in view the basic parameters of safety and liquidity
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