TAX PLANNING

THERE IS NOTHING WHICH
HURTS MORE THAN
PAYMENT OF TAXES…..

THREE COMMMON
PRACTICE TO SAVE
TAXES :-
I. TAX PLANNING
II. TAX AVOIDANCE
III. TAX EVASION

TAX AVOIDANCE :
TAX AVOIDANCE IS MINIMIZING THE
INCIDENCE OF TAX BY ADJUSTING THE
AFFAIRS IN SUCH A MANNER THAT
ALTHROUGH IT IS WITHIN THE FOUR
CORNER OF THE LAWS.

TAX EVASION :
IT IS ILLEGAL AND
UNETHICAL.

TAX PLANNING :

MEANING OF
TAX PLANNING :
TAX PLANNING CAN BE DEFIND AS AN
ARRANGEMENT OF ONE’S FINANCIAL AND
BUSINESS AFFAIRS BY TAKIN
LEGITIMATELY IN FULL BENEFIT OF ALL
DEDUCTIONS, EXAMPTIONS, ALLOWONCES
AN REBATES SO THAT TAX LIABILITY
REDUCES TO MINIMUM.

KEY POINTS TO BE
REMEMBERED :-
 ITS IS NOT AVOIDANCE TO PAYMENT OF
TAX.
 TAX PLANNING SHOULD NOT BE DONE
WITH AN INTANT TO DEFRAUD THE
REVENUE.
 ALL TRANSACTIONS WITH RESPECT TO
TAX PLANNING SHUOLD BE IN CORRECT
FORM AND SUBSTANCE.
 TAX PLANNING WORK WITHIN THE
FRAMEWORK OF LOW AND ITS NOT
ILLEGAL.

RIGHT TO PLAN TAX
LIABILITY .
THE SUPREME COURT HELD IN CASE OF MC
DOWELL & CO. V CTO(1985) HAS SAID
THAT IT IS TRUE THAT PLANNING MAY BE
LEGITIMATE PROVIDED AND IT IS WITH
FRAMEWORK OF LAW.

OBJECTIVE OF TAX
PLANNING :
 REDUCTIONS OF TAX LIABILITY.
 MINIMISATION OF LITIGATION.
 PRODUCTIVE INVESTMENT.
 ECONOMIC STABILITY.

IMPORTANCE OF TAX
PLANNING :
 ITS HELPS TO DEAL WITH THE
BURDENOF DIRECT AND INDIRECT
TAXATION DURING INFLATIONS.
 HELPS IN PROPER EXPENCES PLANNING,
CAPITAL BUDGET PLANNING, SALES
PROMOTION PLANNNING ETC.

ESSENTIALS OF TAX
PLANNING :
 UPTO DATE KNOWLEDGE OF TAX LAWS
AND AWAARENESS OF JUDGMENTS MADE
THROUGH VARIOUS DECISIONS OF THE
COURTS.
 THE DISCLOSURE OF ALL MATERIAL
INFORMATION AND FURNISHING THE
SAME TO THE IT DEPARTMENT.
 TAX PLANNING SHOULD NOT JUST
COMPLY LEGAL PROVISIONS AS STATED
BUT SHOULD BE WITHIN THE
FRAMEWORK OF LAW.

AREAS OF TAX PLANNING IN
CONTEXT OF INCOME TAX
ACT 1961:

1. FOR INDIVIDUALS :

2. AT THE TIME OF SETTING
UP OF NEW BUSINESS
ENTITY:
 FORMS OF ORGANISATION/
OWNERSHIP PATTERN :
 LOCATIONAL ASPECTS :
 NATURE OF BUSINESS :

3.FOR THE BUSINESS
ENTITIES ALREADY IN
EXISTENCE :
 TAX PLANNING IN RESPECT OF CORPORATE
RESTRUCTING.
 TAX PLANNING IN RESPECT OF FINANCIAL
MANAGEMENT.
 TAX PLANNING IN RESPECT OF EMPLOYEES
REMUNERATIONS.
 TAX PLANNING IN RESPECT OF SPECIFIC
MANAGERIAL DECISIONS.
 TAX PLANNING IN RESPECT OF FOREIGN
COLLABORATIONS AND JOINT VENTURE
AGREEMENTS.
 TAX PLANNING IN THE VARIOUS DOUBLE
TAXATION AVOIDANCE AGREEMENTS.

THANK YOU