Tax planning is an activity that enables you to reduce your tax liability.

It is
one of the most basic yet integral parts of the financial plan, and it helps
you save your capital. Several options enable taxpayers to reduce their tax
liabilities, especially those that fall under Section 80C of the Income Tax
Act of 1961.
Under this section of the IT Act, you can claim tax deductions of ₹150,000
on various kinds of investments such as tax-saving fixed deposits, PPF
contributions, EPF contributions, Unit Linked Insurance Plans (ULIPS), and
National Pension System, among other things. Here’s everything you need
to know about tax planning objectives and methods, especially if you are a
first-time taxpayer.

Objectives of tax planning

First-time taxpayers must understand the fundamental objectives of
planning their taxes. They are as under:
1. To reduce tax liability: Tax planning primarily revolves around
reducing your tax liability. Every single taxpayer wishes to reduce the
burden of paying the taxes while saving their money for their future.
Fortunately, the Government offers several different investment
schemes through which liabilities can be reduced significantly.
However, it is essential not to leave tax planning to the last moment.
Plan to invest in tax-savings instruments from the beginning of the
financial year and avail all the advantages to reduce your tax
payments.
2. To minimise litigation: Minimising legal litigations is essential while
planning taxes. If you don’t have one, you must avail the services of
a legal advisor. Consult your advisor and adopt the adequate
provisions of tax planning laws, so that you can minimise the
litigation. Minimising litigation saves you from judicial harassment. 
3. To stabilise the economy of the country: The taxes you pay are
devoted to the betterment of the country. If you pay all the taxes
which are legally due, you can contribute towards creating a more
productive economy. Planning your taxes is beneficial for you and the
economy of the country in which you’re living. 
4. To leverage productivity and financial growth: Planning your
taxes prudently can facilitate economic growth for you. Chalking out
clear and precise financial objectives from your investments, over
specific time frames and investing in the right tax-saving instruments
can help you create a good corpus, thereby contributing to your
economic growth.
Benefits

5. Solving tax issues: If you owe back taxes or have other tax issues, planning
can help you address these concerns and find a solution.
6. Building a college fund: Tuition costs have risen exponentially in previous
decades. If you want to build a college fund for your child, you can take
advantage of the American Opportunity Credit to help you minimize future
education expenses.
7. Supporting your business: Starting or sustaining a business is challenging
for many reasons — tax liability need not be one of those reasons. With small
business tax planning, you can boost your business and accumulate more
resources for growth.
8. Saving for retirement: Your retirement contributions can grow tax-free over
time, resulting in a sizable nest egg for the future. Retirement might seem a
long way off, but early planning is vital for a comfortable post-career life.
9. Maximizing an estate: If you have an estate large enough to incur state
or federal estate taxes, proper planning can make a notable difference for
your family’s finances, reducing your liability.
10. Securing more for your heirs: With thoughtful tax planning, you’ll have more
to pass on to your heirs. You can also work to minimize your heirs’ inheritance
tax liability, so they can keep more of your lifetime earnings.