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Direct tax collections is one of the easiest and safest ways of collecting revenues by the Government. In spite of our greatest reluctance all of us are in the tax net and contribute a sizeable portion of the revenue of the exchequer. The law provides for levying of taxes at different stages and forms of income .On the contrary it provides impetus for effective savings out of the income generated by us through which we can reduce our tax liability. Such investments provide dual purpose for both the assessee and for the Government. On the one hand it reduces tax liabilities in our hand and on the other hand it provides sizeable funds in the hands of the Government 

Our main aim in tax planning is to pay minimum taxes by abiding with the legal statute and maximizing return on our investments by investing on the correct instruments at the correct time of our life. 

I endeavor herein below in brief some of the important aspects in this respect:  
Some people have a wrong notion that tax planning is useful only once you reach an advanced stage of life or are well settled in a business or profession. That is not true. In fact, the best time to start tax planning is right from day one when you start having any income in your name. The sooner you enter the wonderland of tax planning, the better it will be for you in the long run. The benefits of tax planning adopted in the initial years of life will come in very handy when you are planning your retirement. The longer the duration of your tax planning, the better results it will yield to you in years to come. Thus, the right time to begin tax planning is when a person becomes a major. And, it should be continued in right earnest, year after year. Here is how … 

Tax Planning upon Becoming a Major 
·         Take your first lesson of tax planning when you attain the age of 18 
·         Document all the amounts you receive 
·       Small cash presents you receive on various ceremonial occasions should be put into the bank 
·      Separate income tax files for each individual so that one’s income is not added with that of other family members. 

Tax Planning Once You Start Earning 
·         Systematically maintain your withdrawals, banks deposits, etc. 
·       Save as much as you can because being single you have fewer financial commitments
·   Open a PPF account and put money in the account as much as you can. This investment is tax free and also remains blocked for a minimum period of 15 years. 
·         Stop luxurious spending as this is not the age for that. 
·         Go for some insurance policy with long period of maturity. 

Tax Planning When You Get Married 
·         Avoid gifts to your spouse after marriage as the income arising from the same will be clubbed with your income. Best planning would be to make a gift to your prospective spouse just a few months before your marriage. 
·         If your spouse is not a working woman, do not withdraw for household expenses from her account. Utilize that fund for tax saving investments. 
·         Start some pension plan investment which will be beneficial when you retire. 
·         Start savings for a house of your own if you don’t have one 
·         If yours is a joint family open a HUF account and maintain separate file for the same. 

Tax Planning after a Decade of Your Marriage 
·         Start investments in the name of your children 
·     In case of fund constraints take some small but long term insurance policies in the children name for their education and marriage. 
·       Invest the maturity value of your certain early age investments into long term risk free investments. 

Tax Planning after the Marriage of Your Children 
·     Income in the group is distributed amongst yourself your spouse and your son, daughter in law 
·         Prepare your will and adopt tax planning relating to your will to secure tax saving to the family members.

Tax Planning for Senior Citizens 
·  Open joint bank accounts and put all your maturity value in the same.
·  Invest is safe instruments and in joint names. 


Intelligent tax planning calls for changes in approach every few years. It is, therefore, recommended that you must review your investment and tax planning perspective at least every decade and reorient it depending on the facts and circumstances of the situation.

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