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Income tax returns (ITR) filing: What is tax planning

May 08, 2018, 03:49 PM IST

Income tax returns (ITR) filing: The new fiscal has started and everyone should be firming up their investment plans to save tax. So how to make sure that your effort to save taxes is not compromised by your ignorance, and you still manage to save taxes? Let us understand what is tax planning as this is the first step?

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1. Tax planning is nothing but an art which helps you save taxes by using every possible income tax provision defined under Income Tax Act. Photo: PTI

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2. Tax planning activity warrants optimisation of your tax savings and minimising your tax outgo yet remains within the framework of laws of the land. Photo: PTI

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3.You must have heard of some of the most popular income tax provisions. For example section 80C which allows you a tax benefit for your investment and some specified expense also, then there is your medical premium u/s 80D or HRA benefit for your monthly rental. Use them to the optimum level. Photo: PTI

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4.One should never miss a single item that allows you to save tax. You must familiarise yourself with them. Effective and comprehensive tax planning will save a lot of money for you. Photo: PTI