B.Com.(Hons.

): VI SEMESTER
BCH601: TAX PLANNING & MANAGEMENT
Dr. SANTOSH KUMAR
ASSISTANT PROFESSOR

BCH 601: Tax Planning & Management

 Unit: 1

Meaning & Scope of Tax Management

Tax Management : Tax Management is necessary for Tax-planning. Tax

management refers to the compliance with the statutory provisions. While tax
planning is optional, tax management is of law. It includes maintenance of accounts,
filling of return, payment of taxes, deduction of tax at source, timely payment of
advance tax, etc. Poor tax management may lead to levy of interest, penalty,
prosecution, etc. In some cases, it may lead to heavy financial loss if proper
compliance is not made.
Example: If a loss return is not fi led in time it will result in a financial loss because
such loss will not be allowed to be carried forward.
Tax Management includes maintenance of records in prescribed format. It also
includes getting audited the records, fi ling returns and pay taxes. It is a regular
feature of business enterprises and a form of tax planning. Here employees use
CBDT (Central Board of Direct Taxes) and employers can use TDCAN (Tax
Deduction and Collection Account Number).
Tax management covers the following items:
(i) Steps to avail tax incentives.
(ii) Rectification of mistakes

(iii) Compliance with legal formalities.

(iv) Saving from interest and penalties.

SCOPE OF TAX MANAGEMENT

The main scope of Tax Management are as under :
1. Collection of Tax at Source : Under section 206C, every seller has to
collect tax at source on forest products etc. The conditions laid down
BCH 601: Tax Planning & Management
 under this section have to bc followed. A certificate is to be issued to the
buyer regarding tax collected at source.
2. Maintenance of Accounts : Every business house should maintain such
books and documents, which may enable the Account Officer to compute
the total income of the assessee. The accounts should be maintained
properly under section 27 IA.
3. Payment of Sums : There are certain amounts, which should be paid on
or before the due date and proof of such payments are to be submitted
along with the return for deductions. For tax-planning postponement of
the payment is beneficial. These payments are as under :
(i) Any sum payable by way of :
(a) Commission or bonus to employees, or
(b) Interest on loan
(c) Contribution to Provident Fund, Gratuity Fund or any Fund for the
Welfare of Employees.
(d) Tax, Duty, Cess and Fees.
(e) Encashment of leave.
(ii) Any payment made to a person, which the assessee wants to claim as
deduction. Any payment in excess of < 20,000/from F.Y. 2017-18 10,000
is disallowed. If payment is made for hiring of goods carriages, the limit of
disallowance shall be more than 35,000.
(iii) Contribution to Employees Provident Fund under Employees State
Insurance Act, 1948, must be deposited in the fund on or before the due
date.

BCH 601: Tax Planning & Management

4. Furnishing the Return : Every person should submit his return of income
on or before the due date of furnishing the return u/s 139(1). In case of
default penalty and interest may be charged.
5. Review of Orders : If there is any mistake in the order, an application for
rectification should be made to the department. Appeal may be filed in
case of unjust decision. Thus the orders can be reviewed by the
department.
6. Fulfilment of Conditions : If any capital gain is there, the assessee should
try to deposit the amount in Capital Gain Account Scheme, 1988, before
the due date of furnishing the return, so that exemption may be available
to him.
7. Audit of Accounts: If the turnover in business in the previous year
exceeds by ₹ 2 crore and in case of profession by 50 lakh, the audit is
compulsory (Sec. 44AB and Rule 64). To claim exemption, under certain
sections the audit report is required in prescribed form as under:
i. For Section SO-IA Form No. 10CCB
ii. For Section SO-IB Form No. 10CCB
iii. For Section 80JJAA Form No. 10DA
8. Documentation: Documentation is compulsory in tax management. All
assessee should keep complete and updated documentation of all relevant
tax. The assessee may lose the benefits for want of proper documentary
evidence.
9. Payment of Tax : An assessee who is liable to pay tax of 10,000 or more
in the previous year has to pay advance tax.

BCH 601: Tax Planning & Management

10.Deduction of Tax at Source : Deduction of tax at source should be made
within the time as prescribed in Rule 30 of the Income-tax Rules, 1962. A
certificate regarding tax deducted at source should be furnished.

BCH 601: Tax Planning & Management