About Tax Planning 2018
As responsible citizens of our country, we have an obligation towards it that is called Income Tax. In other words, every citizen of the country who earns an income equal to or over a specified amount (as prescribed by the govt.) must pay his tax through a practicing Chartered Accountant or individually, as specified in the Income Tax laws. While most people are sincere towards their tax liability, there are some mischievous ones who are in constant strive for getting away from the obligation. However, this is an immoral act and those who get caught, are liable to the harshest of punishments under the law.
The best option in our view is not to avoid your Income Tax liability altogether; rather minimize it. This act of minimizing your cumulative Tax liability is also called Tax Planning, which we are going to explain in detail later. So, what exactly do we mean by Tax Planning and how can it be exercised for the benefit of a common taxpayer as well as large corporates. Read on and get all your answers here!
What is Tax Planning 2018?
Tax Planning is the process of analyzing one’s finances from a tax efficiency point of view, bearing in mind the aversion of tax on one’s income. Tax Planning permits a taxpayer to utilize the various tax deductions, exemptions, and benefits in order to minimize their tax obligation over a given financial year. Tax planning is actually the efforts put to reduce the overall tax liability, but it certainly does not mean planning to averse or avoid tax altogether.
Tax Planning in India:
In a country such as India, there are plenty of Tax saving options available and to all taxpayers as well. Such options permit a wide range of deductions and exemptions, that allows limiting the overall tax liability of an individual. The deductions that are available are under section 80C through section 80U and can be claimed by all taxpayers who are eligible for them. These deductions are available against the major portion of their tax liability. Additionally, there are some other sections under the Income Tax Act, 1961 which allow the reduction of a taxpayer’s liability through certain exemptions and tax credits.
Tax planning 2018 is a fully legal activity when done inside the defined frameworks of concerned authorities and in fact a smart action to perform. However, adoption of some unconventional techniques to avoid tax payments is certainly illegal and may get the taxpayer into trouble. There can three main tax saving practices and they are tax avoidance, tax evasion, and tax planning. However, only the tax planning technique is legal and recognized as a tax saving methodology. The government also has initiated some legal tax planning methods for the benefit of common taxpayers to aid them in the reducing their tax burdens.
Corporate Tax Planning 2018:
Corporate Tax planning 2018 is a way of reducing the tax liability of a registered company. The usual methods of doing so include taking deductions on office expenses, health insurance of employees, business transport, childcare, retirement planning, charitable contributions etc. A company can significantly reduce its tax burden and that too in a legal way by following the various tax deductions and exemptions provided by the Income Tax Act, 1961. Here too, tax planning shouldn’t be confused with tax aversion and it must be done strictly adhering to the framework provided by the law.
Increasing profits for a company invariably means greater tax liabilities. This, it becomes almost necessary for them to allocate enough resources on tax planning to minimize the liability. If they follow proper tax planning procedures, the direct tax and indirect tax burden get significantly reduced in times of inflation. It can also help them in planning for the capital budget, sales and marketing and other expenses. Here are some ways to adopt that lead to efficient tax planning 2018:
- Revealing accurate information for IT departments.
- Being aware of all relevant tax laws and court procedures regarding them.
- Doing your tax planning in adherence to tax laws.
- Tax planning must be done keeping the business interest in mind and it should be malleable enough to incorporate alterations later.
Types of Tax Planning 2018:
- Purposive: Tax planning is done with a specific target in mind
- Permissive: tax planning which is under the purview of law.
- Long range and Short range: Tax planning that is conducted at the beginning and end of a particular fiscal year.
Tax saving objectives:
These are the primary tax saving objectives of any company:
- Reducing the quantum of tax liability
- Economic solidity
- Progression of the economy
- Minimization of litigation
- Fruitful investment
Tax Planning 2018 Course Description
- What do we mean by Tax Planning?
Tax planning means to reduce the overall tax liability of a taxpayer through the means of various deductions, exemptions, rebates etc. that have been provided by the IT law. The IT law itself has provided several methods of tax planning exemptions under section 10, deductions u/s 80C to 80U and through various reliefs and rebates. Given below are a few of these provisions:
- Investment in securities given u/s 10(15). The interest accumulated on such securities is fully exempted.
- Exemptions provided under section 10A, 10B and 10BA.
- A residential position of the taxpayer.
- The choice of his/her accounting method.
- Choice of his/her organization.
A word of caution: To avail the full benefits of tax planning strategies 2018 one must resort to only bonafide and legal means which are under the framework of law, in spirit and in a letter.
- Is tax planning the need of every taxpayer?
Yes. Tax planning is required to maximize the inward cash flow and minimize the outward flow. As we know by now, a tax is a kind of cost; and the reduction of cost leads to what? Profit! Thus, every prudent person who wishes to earn greater profits would resort to a tool that can reduce his tax liability; and this is what is called Tax planning.
- How is the technique of Tax Planning worked out?
Always remember to follow these tips before working out your Tax Planning:
- The must be executed before the accumulation of income. Any tax planning that is done after the accumulation of income is deemed as ‘Application’ of Income and gives the impression of a fraud.
- Tax Planning Strategies is always executed at the source of income.
- For the choice of a Taxable Entity as an organization, a proprietorship concern, firm or a company may be taken.
- The choice of location of an undertaking, a division or a business plays a significant role in Tax Planning.
- Residential Status of an individual. Any taxpayer liable to pay Income Tax in India must arrange his stay in India in a manner that he is considered as an NR Indian.
- Choice of Buying or Leasing of Assets. If the assets are purchased outright, some amount as depreciation is allowable. If the assets are put on a lease, a lease rental is allowable as a deduction.
- Capital Structure decision. There must a balanced amount of debt and equity to make the most of the return on capital and minimize the tax obligation. Interest on debt is permissible as a deduction but dividend on equity fund is not.
What are the Requirements/Pre-requisites of Tax Planning course?
Tax Planning is an essential activity for every person who dwells in the stipulated tax bracket as prescribed by the government’s finance department in India. Since Tax Planning involves the minimization of a tax liability of an individual, thus it becomes an essential activity for every wise taxpayer.
Tax Planning Training offered by our organization is a completely online academic course comprising of study materials, videos and tutorials, demos, online chats, and FAQ’s all available on our homepage for student reference. Here are some basic requirements/pre-requisites for a student interested in our Tax Planning Course:-
- A PC/Laptop with a high-speed Internet Connection and a modern web browser such as Chrome as the entire course is available online only.
- Completion of a basic educational qualification/graduate degree such as BA/B.Com/BBA/CA/CS/ICWA.
- Basic knowledge/Diploma in Automated Accounting Software such as Tally (not mandatory).
- Understanding of/well-versed in the English language as all course materials are in the language only.
- Zeal to learn and gain invaluable knowledge on Accounting and Income Tax concepts and related topics.
- The course is ideal for students/professionals/employees/managers working in medium-high level organizations and want to learn the minutiae of Income Tax for career growth and achieving organizational goals.
Target Audience for this Tax Planning Strategies Training
Tax Planning Strategies is an online course designed and developed by our highly trained and experienced staff especially for those students and professionals who are looking to make a successful career in Income Tax or Chartered Accountancy. This course is also very helpful for these people:
- Management Students – Those pursuing MBA/PGDM/ Ph.D. in management or Financial management.
- Entrepreneurs – People into their own business or aspiring to begin their own venture soon.
- Team Leaders – Accountancy professionals and managers working as a team leader in some medium-high level organization in India or abroad.
- Company Secretaries – Those CS graduates who are into leading organizations of the country serving as Company Secretaries.
- Students – Those aspirants of Accounting or degrees in Income Tax from reputed top-end institutions of the country.
Tax Planning 2018 FAQ’s
- Who can all avail of Tax Planning?
Here is a list of all the essential conditions that a person must fulfill in order to be eligible for the approach of Tax Planning:
- A taxpayer must fall into the stipulated tax bracket as informed by the government’s finance ministry. At present, the income tax is not liable for those salaried employees whose annual salary is less than Rs.5 Lakh.
- The Taxpayer must be a resident Indian or an NR Indian for the required amount of time.
- The amount of Tax is always calculated on the fully accrued income.
- Is Tax Planning different from that of Tax Avoidance? If so, how?
Tax avoidance implies reducing your tax obligation within the framework of the law. In this, a taxpayer looks for deficiencies in the law and tries to exploit those to decrease his/her tax liability.
Tax planning Strategies is a legal way of arranging one’s finances in a way that is within the framework of law you make the best use of all exemptions, rebates, deductions, and reliefs allowed by the law to reduce your tax liability.
- How can the Tax Planning course benefit me?
Our specifically designed online course on Tax Planning enables any student of Chartered Accountancy or any other accounting course to know and practice the techniques of individual and corporate Tax Planning Strategies. Any budding student or a practicing CA would greatly benefit from the practical approach and in-depth case studies of the course.
Tax Planning Strategies Course Testimonials
Mr. Ralph V. Ann (CA, ICAI)
After enrolling for the online course on Tax Planning Strategies, I became aware of entire Tax Planning approaches in India and could effectively use them for the aid of my clients. Thank You eduCBA!
Tanya Sachdeva (enrolled for CPT, ICAI)
Such a comprehensive and practical course this is. I could get through each and every topic with live examples and availability of 24X7 online tutoring. What more can anyone ask for?
Career benefits of the Course
As we have been mentioning previously in the article that Tax Planning Course is suited to those individuals and professionals who are in the domain of Chartered Accountancy/Financial Management and looking to launch a successful career in this field. Our course on Tax Planning Strategies provides to an aspiring manager, all the knowledge, data, analysis, video lectures, query solutions and tools and techniques that are needed to become one. We can guarantee that after successful completion of this online course, the student would not only have gained precious knowledge on tax planning as a subject but would be able to serve his organization in a much better way or find a lucrative job in one of the top companies of the country as a CA or Finance Executive. Listed below are some of the advantages of this course and what exactly will a student gain by it:-
- A student of CA/CS or ICWA courses will be able to prepare IT accounts and file ITR’s.
- Students will gain valuable insight into the techniques and methods of Tax Planning in India.
- Students will be able to distinguish clearly between Tax Avoidance, Tax Aversion, and Tax Planning.
- Students will learn the various tools of Tax Planning and which one to apply in different situations.
- Students will learn a totally new subject pertaining to the Accounting discipline.