Tax planning involves legally arranging one's financial affairs to minimize the tax burden by taking advantage of all exemptions and deductions allowed under tax laws. It requires a proper analysis of all direct tax laws and should not involve tax avoidance. The objectives of tax planning are to claim deductions, reduce tax liability, make productive investments, and reduce costs while supporting the healthy growth of the economy and generating employment. Tax planning is important as it helps taxpayers reduce their liability, helps the country collect more revenue to fund new development schemes, and helps society by redirecting taxed amounts into industries that invest in companies and create jobs.

1. TAX PLANNING
Tax planning may be defined as an
arrangements of one’s financial affairs in such
a way that without violating in any way the
legal provision of an act , full advantage is
taken of all exemptions, deduction, rebates,
permitted under act, so that the burden of the
taxation on an assessee , as far as possible the
least.

2. PRECAUTION IN TAX PLANNING
 Require proper analysis
 Can’t be attempted in isolation
 Should view all direct tax laws
 Should not be based on tax avoidance
 Tax planning is not possible without tax
management

3. OBJECTIVES OF TAX PLANNING
 Claim deductions
 Reduction in tax liability
 Productive investments
 Reduction in cost
 Healthy growth of economy
 Employment generation

4. IMPORTANCE OF TAX PLANNING
 For tax payer it helps in reduce tax
liability
 For country it helps in starts new scheme
for the progress of nation
 For society it helps in the taxed amount
used in invested in industry and can
establish new company which also provide
employment.