Tax Planning in India

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Tax Planning in India is an application to reduce tax liability through the finest use of all accessible allowances, exclusions, deductions, exemptions, etc to trim down income and/or capital profits.

Salaried individuals in India are not fully aware of the tax planning exercise which is why they rush at the end of the tax-planning season and make investments to reduce their tax liability. This has negative effect on tax payable by them and they eventually end up paying more taxes than they are required to.

Tax Planning in India for Salaried Individuals

Make full use of the entire Section 80C deduction

The maximum reduction available in Section 80C is Rs.1,00,000 and salaried citizens whose gross salary is Rs.2,50,000 or more are entitled to use the full Rs.1,00,000 limit.

Individuals who make monetary infusions of over Rs.1,00,000 in Section 80C in selected areas fail to understand that the advantages are limited. In spite of investing Rs.70,000 and Rs.40,000 in Public Provident Fund and ELSS respectively, the amount entitled by the investor is only Rs.1,00,000.

Following investments/contributions meet the criteria for Section 80C reduction:
  • Public Provident Fund
  • Accrued interest on National Saving Certificate
  • Life Insurance Premium
  • National Saving Certificate
  • Tuition fees paid for children's education (maximum 2 children)
  • Principal component of home loan repayment
  • 5-Year fixed deposits with banks and Post Office
  • Equity Linked Savings Schemes (ELSS)

Reduction of tax liability beyond Section 80C deductions

If your salary surpasses Rs.250,000 per annum and the reductions under Section 80C are not enough to minimize the general tax liability consider the following:
  • Home loan: Interest payments of upto Rs.150,000 pa are entitled for reduction under Section 24.
  • Medical insurance: A deduction of upto Rs.15,000 pa under section 80D is applicable under this.
  • Donations: Tax advantages under Section 80G entitle the donations to particular funds/institutions.

Assert tax advantages on house rent paid

If HRA is not included in the salary structure then the salaried individuals can asset rent paid by them for residential lodging. This reduction is accessible under Section 80GG and is smallest amount of the following:
  • 25% of the total earnings or,
  • Rs.2,000 every month or,
  • Surplus of housing charge paid over 10% of total salary

Reorganize the salary

Reorganizing the salary and incorporating certain apparatus can help in the long run in minimizing the tax liability. In order to assert tax benefits salary reform is a more competent measure. The following can be included in an individual's salary structure:
  • Food coupons can release up to Rs.60,000 per year from tax
  • .
  • Medical expenses which are compensated by the employer spare up to Rs.15,000 per year.
  • House Rent Allowance (HRA) should be incorporated in the salaries of individuals who stay in rented houses
  • Transport allowance discharge upto Rs.800 per month.

Go for a combined home loan

The primary reimbursement on a home loan is entitled for a reduction of up to Rs.1,00,000 pa and the interest rewarded is entitled for a reduction of up to Rs.1,50,000 pa. When a home loan is for a considerable amount then the interest and chief reimbursement surpass the allotted limit. A salaried individual can go for a combined joint home loan with his parent, spouse or sibling, to guarantee the best utilization of tax advantages.

In this way both the owners can assert tax reductions in the percentage of their stake holding in the loan.

Tax Planning in India for Businesses

The business tax planning services in India are provided for companies and organizations as well as corporate professionals. Normally, as part of these services, the clients are assigned chartered accountants on an exclusive basis.

These CAs deal with the business houses through e-mail and telephone and help them with their all their tax planning and compliance related requirements. They are also helped regarding their tax compliance, planning, and accounting requirements.

The clients can contact the chartered accountants as per their convenience. These plans are mostly available for one year each. These packages provide the following benefits:
  • Latest corporate tax planning software.
  • Rectification filing of ITRs if there are errors in the original entries done by the users.
  • Phone based support for dealing with the queries of the clients.
  • Reminder notifications through SMSs.
  • Questions regarding corporate tax planning are answered through e-mails.
  • Interpretation of intimation notices.

Tax Planning Companies in India

Following are some leading tax planning companies of India and their contact details:
New Delhi Office:
1110, Indra Prakash Building
21, Barakhamba Road, New Delhi 110 001
Telephone number: +91 11 4361 2130 (Not for Customer Support)

Bangalore Office:
#411, 1st Floor,
1st Main, 7th Block, "C" Cross,
Koramangala, Bangalore 560095
Telephone number: +91 80 4142 6212 (Not for Customer Support)
Customer Support: [email protected]
Any Other Query: [email protected]

Registered Office: ICICI Pru Life Towers, 1089 Appasaheb Marathe Marg, Prabhadevi, Mumbai 400025.
Telephone number: 40391600

HDFC Securities
Customer Care Desk
HDFC Securities Limited,
Trade Globe, 2nd Floor,
Kondivita Junction, Andheri Kurla Road,
Andheri (East),
Mumbai - 400 059
E-mail address for resident customers: [email protected]
E-mail address for NRIs: [email protected]
NRI Dealing Desk: 91-22-30750141- 47
NRI Help Desk: 022-2834-6685
Fax Number: 91-22-2834-6690

Bajaj Capital
Bajaj Capital Ltd.
Bajaj House, 97, Nehru Place,
New Delhi - 110019
Telephone number: 011 -41693000, 26410315, 26415672, 6418903/04/06
Fax: 011-26476638, 66608888
Call Centre number: (+91 11)39881010
E-mail address: [email protected]

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