Income Tax Planning in India
Income Tax Planning involves strategically managing income, investments, and expenses to minimize tax liability while ensuring compliance with tax laws. The goal is to optimize tax savings through legal avenues available under the Income Tax Act, 1961.
Key Features:
- Utilizing Deductions: Claim deductions under sections like 80C (for investments in PPF, life insurance), 80D (health insurance), and 24(b) (home loan interest).
- Tax-Advantaged Investments: Invest in tax-saving instruments such as ELSS, National Pension Scheme (NPS), and Public Provident Fund (PPF).
- Income Splitting: Distribute income among family members to leverage lower tax slabs.
- Effective tax planning helps individuals reduce tax liability, maximize savings, and ensure financial efficiency.