Tax planning | Tax | Blog -BTHAWK

How to do tax planning??? BTHAWK

  • 22-10-2022

What is Tax Planning??

Tax planning is the analysis of financial planning or situation to ensure that all the elements work together to allow you to pay the lowest prices. Understanding what is tax planning is the most important part of financial planning.

It is a process where one analyzes his financial situation according to tax efficiency. Tax planning means a reduction of tax liabilities as per the exemptions, deductions, and benefits.

What are the types of tax planning??

Different aspects of tax planning are broadly classified:

  • Purposive tax planning means planning taxes with a particular objective in mind.
  • Permissive tax planning: Tax planning under the law's framework.
  • Long-range and short-range tax planning: Planning done at the start and end of a fiscal year respectively.

Why should you do tax planning??

Tax planning diminishes tax liability by saving the maximum amount of tax by arranging their financial operations according to tax decisions. One of the biggest benefits of tax planning is that the return can be directed to investments.

Advantages of Tax Planning:

  • Save Tax: The main objective of Tax planning is to reduce the amount of tax your business pays by maximizing its deductibles.
  • More to invest: By knowing your tax liabilities, you can reinvest funds that would otherwise have been earmarked for tax back into your business.
  • Strategize: Tax planning is a great opportunity to look at the option open up to your business and fine-tune its strategies in all the areas while we’re analyzing its data carefully.

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