Meaning Of Tax Planning


To avoid the unnecessary tax or postpone it, there is a need of doing tax planning. It can properly arrange your matters in efficient manner. By applying the tax planning strategies it would be easy for you to invest more money or save the money. In other words, with the help of tax credits, hastening tax deductions, tax-law provisions and sometimes with the help of maximum use of breaks that is available under Internal Revenue Code. The federal income tax rules have become intricate. To avoid taxes there is no need to change the financial behaviour. At the time of reducing the tax bills there is need of efficient tax planning strategies that can gives permission to you so that you can do what you want. Get to know more about taxes and how you can effectively manage it by going to this page 

Connection between financial planning and tax planning

Financial planning is said to be an art that can be useful to implement the strategies that will be beneficial to you so that you can reach your financial goal or it may be long-term or short-term. There will be more rich folks if the definite implementation was straightforward. There is a close link between financial planning and tax planning as taxes are considered as great outflow item.

Who need to file taxes?

Any person has to file the income tax return for the financial year. The requirement of filing the tax return is when the taxable income for the year was in excess as compared to the basic indemnities that are applicable to the person. There is the option to file online tax return to avoid the unnecessary hazard. There is the criterion in which basic exemption of an individual for financial year 2014-2015 is Rs. 250,000 except resident super senior citizens or resident senior citizens. That is the reason why persons under the above mentioned criterion need to file the tax return.

What forms are required to file the tax return?

Form ITR 1 i.e. Form Sahaj or Form ITR 2 are required to file by salaried persons. Have a look on below mentioned conditions in which you need to file the tax return in ITR 2.

In case you have capital gains
In case you are inhabitant and own any kind of assets in foreign country
In case you have tax exempt income i.e. above Rs. 5000
In case you own more than one house properties
In case you gain income from race horses or through lottery

Get to know about form ITR-V

When a return is e-filed with no digital signature, tax department’s server generates the document which is known as ITR-V in which V mean verification. It has the information about e-filed return. After filing the return, the taxpayer need to verify the précis mentioned in the form, then make a print and sign the form after that the same need to send to the Income Tax Department’s Centralized Processing Centre.