In this world nothing can be said to be certain, except death and taxes. – Benjamin Franklin
Whether we like it or not we have to share part of our income with the government, but with smart income Tax planning we can arrange your affairs in ways that would postpone or avoid taxes altogether. When you employ effective tax planning strategies, you have more money to save or invest, or both.
Financial planning and tax planning are closely connected due to the fact that taxes are a huge expense as you go through life. If you become very wealthy, taxes will be your single greatest expense over the long run, thus planning to reduce taxes is a critical part of the overall financial planning process.
Income Tax planning is one of the most important aspects of personal finance. It forms an integral part of our savings plans. However, 90% of financial mistakes by individuals in India are made during the tax planning season.
Most of the individuals fail to assess their tax liability and postpone the tax savings to last minute. Hence in India, tax planning is given more importance only during the last two quarters of the financial year. Due to these reasons, they end up paying unnecessary taxes or opt for unnecessary tax savings. Strategies for income tax planning in India often concentrate more on deduction under section 80C of the income tax code. Tax planning should be considered as an integral part of an overall financial plan. This would help individuals in optimizing their tax planning strategies.
You may have often encountered problems in assessing your actual tax liability. As a result, you end up paying more than required amount in form of taxes or buy unnecessary products. Also taking tax planning tips from friends and family who may not be experts affects your overall financial plan.
Good tax planning services advocates paying taxes smartly by utilizing the provisions in the Tax Laws to minimize the tax liability. The best tax saving plan will include a holistic view of the impact of your tax savings on your financial goals.