What is tax planning ? Relevant provisions of the Income Act, 1961 Tax Planning Thoughts / Case Studies / Hints.

Wealth-tax Income-tax
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Why Tax Planning ? A king, a prostitute, Lord Yamaraja, fire, a thief, a young boy, and a beggar cannot understand the suffering of others. The eighth of this category is the tax collector - Chanakya

Why Tax Planning ? The difference between tax avoidance and tax evasion is the thickness of a prison wall. - Denis Healey

Why Tax Planning ? Avoidance of tax liability by so arranging commercial affairs that charge of tax is distributed is not prohibited. A tax payer may resort to a device to divert the income before it accrues or arises to him. Effectiveness of the device depends not upon consideration of morality, but on the operation of the Income Act. Legislative injunction in taxing statutes may not , except on peril of penalty, be violated, but it may be lawfully circumvented - Apex Court in CIT v/s. Raman & Co. Income-tax

What is tax planning ? Reduction of tax liability through availment of deductions, incentives and exemptions. Minimisation of litigation. Defensive measures against tax exposure. Tax planning To what extent permissible The intention should not be exclusively to avoid tax. McDowell & Co. v. CIT 154 ITR 148 (SC) Transaction is valid even if it results in reduction of tax UOI v. Azadi Bachao Andolan & Ors. 263 1TR 706 (SC)

Mahendra Singh