5 Golden Rules Of Tax Planning
You can reduce your tax by using some wise tax planning. Here are 5 important planning for tax deduction.
1. Spread your taxable income among various family members: This is an easy plan in which you can divide your total income among your family members. The entire income of a family belongs to just one member then the tax liability is much higher. Almost each family member must have his or her independent source of income so just spread the total income among them can help to reduce tax . But note that it is not possible to divide one’s income amongst different members and pay lower tax in the name of different family members. This goal can be achieved by intelligent use of of the facility of gifts and settlement.
2. Take full advantage of all tax exemptions: Claiming all the exemptions and deductions which are permissible under the income tax law contains tax plans.In section 10 of income tax act contains many exemptions and permissible. If someone or his/her family not claiming the maximum benefit of exemptions and deductions , then they have to focus on investment planning in the group through which each family member gets full benefit of tax exemption and tax deductions.
3. Take full advantage of tax deduction: The individuals should try to avail of benefits of various tax deduction available under income tax low. Everyone should know that various investment options that offer tax rebates under various IT law.
4. Exempted Income: The exempted incomes are the innumerable incomes under the Income Tax Law which are exempted from the purview of tax. Exempted incomes include interest income from tax-free bonds as also any income from agriculture etc.
5. Keep Tax Planning Simple: You can adopt tax planning but never overdo it. Easy, simple should be the objectives of your tax planning approach.