TAX PLANNING

the goal of tax planning is to arrange your financial affairs so as to minimize the taxes, there are three basic ways to reduces taxes, and each basic method might have several variations. Tax can be minimized by taking advantage of deductions,exemptions,rebate and relief.

For availing tax benefits, one should resort to bonafide means by complying with the provisions of law in letter and in spirit

tax planning encourages savings.

AREAS OF TAX PLANNING

1. country of residence:one way a person can lower their taxes is by changing one's tax residence to a tax haven.
2. double taxation: most of countries impose taxes on income within that country regardless of the country of residence of the person. Most of countries have entered in bilateral double taxation treaties with many other areas.
3. Legal entity: without changing country of residence,personal taxation may be legally deferred by creation of separate legal entity to which one's property is donated.
4. Nature of income: some type of incomes are fully avoided from tax liability , select those type of income.
5. Use own asset or leased asset: where a person buys a machinery instead of hiring it is aviling benefit of depreacition.
6. Capital structure: mixture of debt and equity reduce the tax liability of a n organaization, so plan your capital structure wisely.
7. Buy or make decision
8. choice of accounting system
9. filing of  return
10. corporate restriction
11. foreign collaboration