Language English Tax Services, Service Type Company Secretarial Services, Service Location India

Tax planning should not be considered a device to reduce tax burden. Truly, It helps savings by investments in government securities. Savings and correspondingly, Reduce extravagance inflation. Tax savings are permitted only for investment made i n public sector bonds and bonds of priority sectors which ultimately help the nation. Therefore, The savings in tax help the central and government entities at the state level to mobilizes financial resources through in financial assets and therefore the government earns much via the method of by sacrificing, Other benefits small amount of tax. The supreme court in one case observed that tax planning may be legitimate provided it is within the structure of law . By the government, Tax planning is equally benefited. Savings and investments are interconnected. Before making investments the person has to consider various factors such as liquidity, When he requires the amount to fulfill the educational expenses house construction, Of children, For marriage or for a secure future after retirement. Security of the investment. The return and tax on income on such investments. This varies from person to person. A person through allocating resources to nsc saves on his the charges, Tax. However on the investment is if the, Taxable. Again investment is made in ppf, He is not obligated to settle the earnings tax on interest. But the period of nsc is six years whereas in the event of ppf the period of repayment is 5 years. However, A portion can be claimed after 7years. Thus the person who makes the investment has to consider whether he requires the amount after 5 years or he can wait for an extended duration period. To make investments there should be savings. A lower income person also wants but his, To save gross income and day, To, Day expenses don t leave him anything to save. As an illustration, When he has to save rs 20 from tax by investmenting in nsc, He has to invest rs 100. Sometimes considering his financial needs he will be prepared to pay the tax of rs 20, So that rs 80 is there for his other the capacity, Needs. Therefore of savings is also very relevant. To increase savings one should make investments that give reasonable returns. Again this return becomes a saving if invested. This booklet talks about the deductions available under various head such as salary and house property and also various modes of investments and tax deduction available from the said investments. The rebates, Concessions and, Liability of tax in this article are with reference to the assessment year 2001, 2002 financial year april 1, 2000 to march 31 2001 . The amendments produced by the budget 2001 are also touched upon in brief.