Tax payment is a significant concern for businesses, corporates, and individuals. They always find ways to minimize tax payments and save money. Apart from reducing tax payments, complete planning of payable taxes in every financial year is also crucial. In India, there are various rules for residents and non-residents related to tax payments. Based on these rules, tax payments are planned. Companies and individuals also take the help of financial advisors for tax planning. Services like nri tax planning in india are also available for aiding non-residents in their tax planning. The benefits of all these plans are-
To save money/ income
Income of more than 2,50,000 per annum comes under taxable income. As the income increase, the tax charged on it also increases as per the government rules. However, everybody wants to minimize their tax payment and save money. For this, people mostly invest in long-term savings. Showing long-term investments like NSP, mutual funds, home loans, etc. in the accounting book reduces tax payments. Tax planning involves decisions on such investments. By investments, the money will not be in your hand but become a crucial future asset.
To reduce tax liabilities
Tax planning is necessary to reduce tax liabilities. Every business and individual wishes to reduce their spending on taxes for which tax planning is done. Under this planning, important investment decisions are made. These decisions reduce tax payments and save the money for future. For saving tax, long-term investments are made, which becomes a future asset of the company. This way tax planning provides two-fold benefits.
For the economic stability of a company
Every business and individual indeed wants to reduce tax liability. But, it is also equally true that the unfair means of tax saving can create serious consequences for them. The tax paid by individuals and businesses is used for the betterment of the country. Proper tax planning ensures a regular flow of tax to the government. It ensures the flow of white money in the business which overall aids in the economic stability.
Reduce litigations
Businesses and individuals have to meet tax collectors and local and state authorities regarding tax payments. In case of tax disputes, one has to visit the offices of these authorities multiple times. However, efficient tax planning saves one from this waste of time and effort. Proper tax planning ensures that no tax disputes arise for businesses and individuals.
To avoid tax penalties
The law does not permit any tax evasion in our country. There are strict regulations for tax evasion in India. Businesses or individuals cannot afford any negligence in tax payments. Hence, prior tax planning is crucial. Otherwise, one has to pay heavy penalties to the government.
The need for tax planning is so demanding that auditing companies also provide these services. The auditing companies have different experts for GST, Income Tax, and NRI tax payments. For saving tax payments of NRIs, there is various nri investment advisor in india as well. If you are not aware of the tax-related laws in the country, these advisors can help you.