Tax is a term that we all want to avoid, but unfortunately cannot. It feels like a rocket science to understand the term ‘TAX’ and all the allying terms, but trust me, it is easy, and fun. Tax planning is a way by which you arrange your financial affairs in such a way that without breaking up any law you take full advantage of all Exemptions, Deductions, Rebate and Reliefs allowed by law so that your tax liability will be reduced.
Objective of Tax planning :-
–Claim Deductions under various sections,
–It will reduce your tax liability and you have to pay less tax,
–Minimize the war between Tax Payer and Tax Administrator, Tax payer wants to pay less tax and Tax Administrator wants to extract most of the tax, by using Tax Planning this war is minimized as tax payer is using all legal ways to reduce tax liability,
–Makes Investment :- By tax planning, an Tax payer will invest his money in some good funds which will result in productive returns for tax payer and transfer money to government for investment too.
–Helps in growth of economy,
–Makes society grow,
–Money saved by you will result in investment which will result in employment generation.
One should understand the benefits of tax planning. Its equally important for the person as well to the society.
Importance Of Tax planning :-
For Tax payer :-
Tax payer has to pay less tax by using tax planning because he is using all available exemptions, deductions,reliefs, and rebates. All is done within the boundaries of Law.
For Government :-
To use deduction or exemptions you have to invest money in some scheme which results that you money is transferred back to government and then they can use it to develop the country.
For Society :-
If government invest or start any new project or even tax payer invest his saved money so he will generate employment, Government can invest in better projects which develops society.
So now we understand how much important and beneficial taxation is to the person, society and country as the whole. Tax planning is a critical component of wealth
management, and a good taxation strategy will be well-coordinated with your overall plans for business, investments, risk management, estate, and retirement.
While financial professionals can perform many functions of the tax planning process, some activities require the expertise of an accountant or a CPA. That is why we need experts like H&R Block to manage our tax and financial activities. They have an army of 700+ experts who will manage your tax issues like a cake walk. And you can then focus on other things in your life, comfortably !