Tax planning is the strategic approach of minimizing tax payments by utilizing all available deductions, allowances, and exclusions permitted by law.

This process involves structuring income in a legal manner to take advantage of various exemptions and deductions. Tax planning utilizes advantageous provisions within the framework of tax laws, allowing taxpayers to benefit from deductions, credits, concessions, rebates, and exemptions in a fair and lawful manner.

There are three forms of tax planning:

• Purposive Tax Planning:

This involves the strategic application of tax provisions in an intelligent manner to leverage tax benefits aligned with national priorities.

Business transactions are properly designed to align with the requirements of tax laws.

• Permissive Tax Planning:

This form revolves around plans that are permissible under various provisions of the law.

Examples include strategies for earning income that is exempted from tax.

• Short-Range Tax Planning:

Short-range planning is an annual approach aimed at managing tax liability by the end of the fiscal year.

It does not entail a permanent commitment, and adjustments are made on a yearly basis.

• Long-Range Tax Planning:

Long-range tax planning is a strategic undertaking that considers the tax outflow over an extended period.

Measures are taken to achieve maximum tax efficiency in the long run.

It involves a comprehensive approach, recognizing that long-term planning may not yield immediate returns.

Each form of tax planning serves specific purposes, allowing individuals and businesses to navigate the tax landscape in a manner that aligns with their financial goals, targets and the regulatory framework