Part 1-Tax planning

Submitted by
Syed Muneer A13559017032
Akshay Arwade A13559017214
Vimanyu Chaturvedi A135590170
Habib Ur Rehman A13559017
Nishanth pappala A13559017075

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• It is method of reducing the tax liability by

following rules and regulations.

• It is an intelligent approach to minimize burden of

tax by proper utilizing all chances of deductions,
What is Tax allowances, concessions in a legal manner.

Planning? • Tax planning requires efficient tax management,

which involves maintaining proper financial
records, timely payment of taxes, following
procedures, timely filing of returns.

• Source: (Geetha.C.A., 2012)

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Objectives of Tax planning

1 2 3 4
Minimizing Tax Avoiding Making Ensuring a
liability Litigation with tax investments for healthy and
collectors productive cause stable economic
growth.

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Types of Tax planning
Short and long range tax planning

 Short range planning defines set objectives each year.

 Long range planning on the other hand involves long term waiting to get
benefits of investment.

Permissive tax planning

 the planning of tax by obeying the provision taxation laws of our country is
known as permissive tax planning

Source: (Savita gautam, May 2013)

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Contd.,
Purposive Tax planning

 Planning of tax by deceiving provisions of laws is termed as purposive

tax planning.

Source: (Savita gautam, May 2013)

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Instruments for saving tax on Income
Equity Linked Saving Schemes (ELSS) – Section 80C
Life and Medical Insurances – Section 80D
Housing Loan, EPF and PPF – Section 80C
National Savings Certificated – Section 80C
Term Deposits and Bonds – Section 80C
Exemption on voluntary retirement – section 10C

Source: (Savita gautam, May 2013)

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Instruments of tax savings for a
company
By paying salary to the Director
Preliminary expenses or start up expenses
Rental expenses
Capitalization of assets and depreciation
Pay salary to family members, friends against the services received
Entertainment expenses
Meeting expenses
Charitable expenses
Education or training
Expenses related to utilities, transportation and insurances.
Source: H&R Bloc Blog
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Corporate tax
Tax imposed on profits gained by any business or company is known as
corporate tax or company tax.
In India for the taxation purpose companies are broadly divided into two
categories
1. Domestic in India
2. Foreign in India

Source: bankbazaar.com

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Tax benefits for the company
Provisions of Minimum Alternate Tax (MAT) are made not to applicable to
certain foreign companies
Transfer of capital assets are not considered as tax purposes
Deduction can be made expenses due to extension of a business
Deductions to the specific nature of businesses
Reduced rate of tax on dividends received from certain companies
Insolvency resolution

Source: Cleartax.in

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Tax Evasion
It is a way in which individuals or organisations evade tax by illegal or unfair
means.

It is different from tax avoidance, which involves minimising tax in unethical but
legal ways by exploiting certain loopholes in the system.

If caught, leads to litigation and penalties.

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Methods of tax evasion
There are various methods used by people to evade taxes:
• Not paying the tax to the government even when it is due.
• Smuggling of goods across borders
• Submitting false or inaccurate financial statements
• Not disclosing income
• Bribing IT officials
• Depositing cash in offshore accounts
• Auditing fraud

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Penalties for Tax Evasion

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Examples
“bill to one and shift to another”, This is a racket involving fake invoices that are
generated in favour of entities that want to take input tax credit, while those who
don't need the benefit charging a premium. (Source: timesofindia.indiatimes.com)
L&T, ONGC sub-contractors evade Rs 300 cr service tax (Source:
Business-Standard.com)

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References
o Anon., 2018. Cleartax. [Online]
Available at: https://cleartax.in/s/tax-benefits-companies-india
[Accessed 15 03 2019].
o Anon., n.d. Bankbazaar. [Online]
Available at: https://www.bankbazaar.com/tax/corporate-tax.html
[Accessed 15 03 2019].
o Anon., n.d. business jargons. [Online]
Available at: https://businessjargons.com/tax-planning.html
[Accessed 16 03 2019].
o Geetha.C.A., 2012. A study on Tax planning measures adopted by the salaried class in kerala,
Kerala: Mahatma Gandhi University.
o Pandey, S., 2018. H&R Bloc Blog. [Online]
Available at: https://www.hrblock.in/blog/10-tax-saving-tips-startups-business-owners/
[Accessed 15 03 2019].
o Savita gautam, l. g., May 2013. Income Tax Planning: A Study of Tax Saving Instruments.
International Journal of Management and Social Sciences Research (IJMSSR), Volume 2.
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References
o Anon, TOI, Jan 2018
https://timesofindia.indiatimes.com/articleshow/62532874.cms?utm_source=contentofintere
st&utm_medium=text&utm_campaign=cppst [Accessed 16 03 2019]

o Anon, Business Standard, April 2013

o https://www.business-standard.com/article/economy-policy/l-t-ongc-sub-contractors-evade-rs-
300-cr-service-tax-113040400445_1.html [Accessed 16 03 2019]

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