Expert tax planning Advisors in Faridabad

What is Tax Planning ?

For those of us who earn above the income tax slabs, whether from salaried income or business income but if our annual income reaches the taxable slab, Income Tax becomes applicable to us. The tax is either deducted by the employer in the form of TDS if you are salaried or else if in business then you have to pay the tax to IT department while filing your annual returns. During the course of tax planning you get to figure how as how much tax can be saved at the maximum by using legitimate ways. The process of tax planning takes into account many parameters such as your age, your annual income, your tax saving investments, etc and then accordingly your tax planner advises you how you can optmise your tax saving.

Why do I need to do tax planning ?

Tax planning is done with 2 primary objectives. One, to save taxes as much as is legally permissible and Two , to avoid future legal hassles that may arise because of not paying taxes or wrong filing of taxes. Another ancillary objective of tax planning is also to know where to invest money for tax saving purposes. Income tax laws in India are governed as per the Income Tax Act 1961 and the act has very extensive applicability on all kinds of incomes. For proper tax planning you are supposed to take into account which is permitted by IT act 1961.

What is the process of Tax Planning ?

Broadly speaking, tax planning process can be classified into 5 steps.

• First is to know your Income. Here annual income doesn’t just mean you salary or business income, rather you need to take into account other incomes such as rental, bank interest, capital gains etc.
• Second step is to evaluate as how much of maximum tax you can save and what are the options available before you for tax saving.
• Investing in tax saving products normally carries certain lock in period, meaning that your money gets blocked for that time. So you need to also weigh the benefit of liquidity vis-à-vis the amount the you save in taxes. Not necessarily investing in tax saving instruments would bring you better returns on your capital.
• Invest in the tax saving products as defined by your tax consultant in your tax plan.
• File your income tax returns accordingly and avoid paying un-necessary taxes.

How can a tax planner help me ?

Tax planning is very complex and on top of that there are change in regulations, laws and amendments happening every year. So it is really cumbersome to stay updated with the tax laws. An expert tax consultant brings you subject matter expertise and helps you doing the right tax planning. The tax planner not only saves your money but also helps you avoid legal hassles. God forbid, if you receive any IT notices or alerts, your tax advisor guides you on resolving it.