Types of Tax planning in India
- i- Purposive Tax Planning- When a tax planning is done to achieve a
particular object. It may be done according to the residential status
earning or diversification of business and income asset and may replace
also, if is is necessary.
- ii- Permissive Tax Planning- When it is done under the provision of
Country's Taxation laws.
- iii- Short and long range Tax Planning- When a tax planning is done for a
specific year to achieve some objective then it is known as Short range Tax
Planning and when a tax planning is done for future to achieve some
particular objective then it is known as Long range tax planning.
Some of the example of tax planning are as follows
If your total income is Rs 600000 then you can invest excess Rs 100000 in the
notified schemes where you get the exemption and of the balance income Rs 500000
you can get the benefit of the rebate u/s 87A. So in this case you have to pay
NIL Tax but you have to file return.