The tax planning advice banks give clients

The tax planning advice banks give clients might revolve around choosing investments that provide the most favorable return for the lowest tax liability, while an insurer’s approach to tax planning might include using cash value life insurance for its tax-deferral features. Estate planning is a form of tax planning, in that its intent is to minimize estate taxes after death. A number of retail income tax software packages provide tax planning tips along with step-by-step guidance on tax preparation, and tax planning advice is also available online from the IRS and other sites.

Why Every Person Needs Tax Planning?

Tax Planning is resorted to maximize the cash inflow and minimize the cash outflow. Since Tax is kind of cast, the reduction of cost shall increase the profitability. Every prudence person, to maximize the Return, shall increase the profits by resorting to a tool known as a Tax Planning

Methods Of Tax Planning.

Various methods of Tax Planning may be classified as follows:

1. Short Term Tax Planning: Short range Tax Planning means the planning thought of and executed at the end of the income year to reduce taxable income in a legal way.
Example: Suppose, at the end of the income year, an assessee finds his taxes have been too high in comparison with last year and he intends to reduce it. Now, he may do that, to a great extent by making proper arrangements to get the maximum tax rebate u/s 88. Such plan does not involve any long term commitment, yet it results in substantial savings in tax.

2. Long Term Tax Planning: Long range tax planning means a plan chaled out at the income or the beginning year to be followed around the year. This type of planning does not help immediately as in the case of short range planning but is likely to help in the long run.

Permissive Tax Planning: Permissive Tax Planning means making plans which are permissible under different provisions of the law, such as planning of earning income covered by Sec.10, specially by Sec. Purposive Tax Planning: It means making plans with specific purpose to ensure the availability of maximum benefits to the assessee through correct selection of investment, making suitable programme for replacement of assets, diversifying and varying the residential status business activities and income etc.

The tax planning advice banks give clients might revolve around choosing investments that provide the most favorable return for the lowest tax liability, while an insurer’s approach to tax planning might include using cash value life insurance for its tax-deferral features. A number of retail income tax software packages provide tax planning tips along with step-by-step guidance on tax preparation, and tax planning advice is also available online from the IRS and other sites.

Long Term Tax Planning: Long range tax planning means a plan chaled out at the beginning or the income year to be followed around the year. Permissive Tax Planning: Permissive Tax Planning means making plans which are permissible under different provisions of the law.