Wondering whether or not to opt for tax planning services? Read this detailed guide to understand what tax planning is and how it can help your business.

Tax planning is an important process which just cannot be ignored. Many people might find it tedious or difficult because the tax planning concept is not that clear to all. Hiring the best income tax consultants in Kolkata can help in making this difficult process easier.

We are the leading tax firm in kolkata. Our team is composed of qualified, experienced and highly motivated professionals who have years of experience in providing comprehensive accounting services to our clients. Our knowledge and expertise will ensure that you get quality financial advice. Our tax consultant Kolkata firm is available 24×7, 365 days a year in your service. We understand the importance of tax planning and how it reduces your liabilities. 

So, here in this article, we discuss all the nitty gritty details that you must know about tax planning. 

  • Tax planning meaning- As we know tax is the compulsory payment that we are bound to make to the government based on income. Now, tax planning is basically financial planning and analysis for the best tax efficiency. The goal of tax planning ensures you contribute the tax as low as possible. Many aspects come under tax planning like your buying habits, income future spending expenditures and more. Tax planning and management depend upon whether it’s an individual plan or it’s a corporate sector. Nevertheless, the importance of tax planning is relevant for any one of them. For both sectors, tax is submitted to the income tax department during each financial year assessment. 

What is Corporate Tax planning? 

Corporate tax planning is very different from personal tax planning. The accounts team of these corporate firms plan the tax according to the income tax act, of 1961. The motive is to reduce the tax liabilities and also to make this lengthy process bit smoother. As the business grows the tax also gets higher so the tax planning for companies gets even more complicated. Now business organizations take many things into consideration like employee health insurance, transport and office expenses etc and then analyze accordingly to avoid the huge amount of tax burden. 

Why Is Tax Planning In India So Important?

As we are already aware that none can avoid paying taxes hence proper planning is essential. A smart and proper financial analytical plan is necessary for both corporate sectors and individuals. Tax planning for individuals and businesses both includes short-term and long-term benefits.  Here are some benefits of tax planning mentioned below. 

  • Better solutions for Tax issues- Prior planning helps one to find solutions faster if you already have tax-related issues. In case you are just starting with the planning the journey becomes even easier. Tax planning activities helps in minimizing litigations and further protects you or your business from legal liabilities.
  • Reduction of Tax liabilities- A fully analyzed tax plan will help you to sustain your business without getting pressurized because of tax liabilities. 
  • Economic Stability- One of the primary reasons for efficient tax planning is to sustain economic stability. Whether it’s for savings after retirement or savings for the future generation, all is possible with mindful strategic planning.
  • Tax Credits- Businesses and the Corporate sector can benefit from tax planning by taking advantage of tax credits which reduce the overall tax bill.
  • No worry for penalties- Strategic tax planning and tax management also make the organization less prone to penalties because of the prior scheduling of quarterly estimated taxes. 
  • Investment plans- Tax planning method also has an advantage in processing taxable income into different investment plans.
  • Country’s economic growth- Corporate sector can contribute properly with tax planning for our country’s economic growth. 

Types of Income Tax planning

Let’s see what different types of tax planning are and what they are about. 

  • Long-term- short-term tax planning- It is mainly prepared at the very start and the end of a fiscal year.
  • Purposive tax planning- With a fixed purpose in the head this type of tax planning is planned. 
  • Permissive tax planning- Any planning designed keeping in mind the country’s tax-related laws. The government of India has carefully curated income tax laws with the availability of deductions. For example- under sections 80C to 80U of our income tax act 1361 there are some deductions available. So while Tax planning in India this law should be taken into consideration. 

A Guide For Getting Started With Income Tax Planning In India

So, if you are also planning to get started with tax planning you are at the right place then. Here are simple steps for tax planning and tax management for your company. 

  1. Data collection– You need to start by gathering all the information. These pieces of information should include expenses, assets and liabilities. Basically all data of your organization. 
  2. Choosing the best tax strategy- First, analyze the data in hand and after assessment of it, you must pick the best strategy based on that. So for picking up the best strategy for your company you require guidance and valuable expert opinion. 
  3. Tax report & implementation- Once you pick the best strategies with help of your efficient team or on your own you should be able to generate a thoroughly detailed report. This report is the result of applying the best tax strategies. Now the next step is to proceed with this report further legally for the final implementation.

This process is not as easy as it sounds as your goal is to deduct the tax with the help of law and strategy. For this purpose professional help is taken. In conclusion, one thing we all have to agree on is that tax planning for companies in India is much easier due to law relaxation. It is all citizens’ legal duty to pay the tax so with proper management and planning this process can get even smoother. Hence, tax planning is extremely crucial and it should be done diligently. 

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