Tax Planning
Structured, year-round tax planning for individuals and businesses — making use of deductions, exemptions, and provisions available under the Income-tax Act, planned ahead of filing deadlines rather than at the last moment.
What This Service Covers
Tax planning involves understanding the provisions of the Income-tax Act, 1961 — and the amendments introduced by the Finance Act each year — and structuring financial decisions accordingly, within the framework of the law. It is distinct from tax evasion or aggressive tax avoidance: tax planning as described here means making use of exemptions, deductions, and provisions that Parliament has explicitly provided for in the statute, and doing so in a considered and timely manner rather than only at the point of filing.
Shivbhavan & Associates provides structured tax planning assistance as an ongoing, year-round exercise rather than a deadline-driven activity. This allows clients to make investment and expenditure decisions with an understanding of their tax implications before those decisions are finalised, rather than retrospectively.
Sets out the deductions available to taxpayers from gross total income, forming the core of most individual tax planning.
Planning Ahead, Rather Than Reacting
Tax planning conducted throughout the year, rather than only at the point of filing, allows decisions around investments, expenditure, and income structuring to be made with tax implications already understood — rather than discovering after the fact that an opportunity has passed. Provisions such as Chapter VI-A deductions, capital gains exemptions, and the choice between tax regimes each carry conditions and timing requirements that are easier to plan for in advance than to correct later.
This information is provided for general awareness. The tax planning approach most relevant to a given situation depends on individual circumstances and should be confirmed directly with the firm.
Who This Typically Applies To
- Salaried individuals deciding between the old and new tax regimes each year
- Individuals planning investments to make use of available deductions
- Business owners reviewing the timing of capital expenditure and expenses
- Individuals planning the sale of property, shares, or other capital assets
- HUFs structuring income and deductions available to the family unit
- Taxpayers required to compute and pay advance tax through the year
Common Filing Scenarios
Choosing Between Tax Regimes
The choice between the old and new tax regime under Section 115BAC affects which deductions and exemptions remain available, and can meaningfully change the tax outcome depending on an individual's specific income and investment profile.
Planning Around Capital Gains
Selling a property or other capital asset triggers capital gains tax, but reinvestment exemptions under Sections 54, 54F, and 54EC are subject to strict timelines that generally need to be planned for before the sale, not after.
Timing of Capital Expenditure
The timing of capital expenditure within a financial year can affect the depreciation claimed for that year, making the planning of major purchases a genuine tax consideration alongside the underlying business decision.
Advance Tax Obligations
Individuals and businesses with tax liability above the prescribed threshold are required to pay advance tax in instalments through the year, and underestimating this can result in interest under Sections 234B and 234C.
What's Included, By Entity Type
Individual Tax Planning
Utilisation of deductions under Chapter VI-A (Sections 80C, 80D, 80G, 80TTA, and others); selection between the old and new tax regimes under Section 115BAC; advance tax computation.
- Eligible deductions reviewed against current investments
- Regime comparison carried out based on individual income profile
- Gaps in deduction utilisation identified ahead of year-end
- Advance tax instalments computed where applicable
HUF Tax Planning
Structuring of HUF income; identification of permissible deductions and exemptions available to Hindu Undivided Families as a distinct taxable entity.
- HUF income sources and structure reviewed
- Deductions available to the HUF as a separate entity identified
- Coordination with individual members' tax planning
- Compliance with HUF-specific filing requirements confirmed
Business Tax Planning
Timing of capital expenditure; selection of appropriate depreciation method; review of expenses for deductibility under Sections 30–37; presumptive taxation assessment under Sections 44AD and 44ADA.
- Expense deductibility reviewed against Sections 30-37
- Presumptive taxation eligibility assessed where applicable
- Depreciation planning aligned with capital expenditure timing
- Business structure reviewed for tax efficiency
Capital Gains Planning
Planning around the sale of property, shares, and other capital assets; applicability of Sections 54, 54F, 54EC for reinvestment exemptions; computation of indexed cost of acquisition.
- Capital gains computed with indexation where applicable
- Reinvestment exemption options reviewed before sale where possible
- Timeline requirements for claiming exemption tracked
- Capital gains account scheme advised where relevant
Advance Tax Computation
Computation and scheduling of advance tax instalments under Sections 207-211 to avoid interest liability under Sections 234B and 234C.
- Estimated annual income projected each quarter
- Instalment amounts computed against prescribed percentages
- Payment reminders coordinated ahead of due dates
- Interest exposure monitored and minimised where possible
Regime Comparison
Year-on-year comparison between the old and new tax regimes, factoring in an individual's specific deductions, exemptions, and income profile to identify the more favourable option.
- Both regimes computed side-by-side for comparison
- Impact of specific deductions under each regime assessed
- Recommendation provided ahead of the filing deadline
- Employer declaration timelines factored into the decision
Utilisation of deductions under Chapter VI-A (Sections 80C, 80D, 80G, 80TTA, and others); selection between the old and new tax regimes under Section 115BAC; advance tax computation.
- Eligible deductions reviewed against current investments
- Regime comparison carried out based on individual income profile
Structuring of HUF income; identification of permissible deductions and exemptions available to Hindu Undivided Families as a distinct taxable entity.
- HUF income sources and structure reviewed
- Coordination with individual members' tax planning
Timing of capital expenditure; selection of appropriate depreciation method; review of expenses for deductibility under Sections 30-37; presumptive taxation assessment under Sections 44AD and 44ADA.
- Expense deductibility reviewed against Sections 30-37
- Presumptive taxation eligibility assessed where applicable
Planning around the sale of property, shares, and other capital assets; applicability of Sections 54, 54F, 54EC for reinvestment exemptions; computation of indexed cost of acquisition.
- Capital gains computed with indexation where applicable
- Timeline requirements for claiming exemption tracked
Computation and scheduling of advance tax instalments under Sections 207-211 to avoid interest liability under Sections 234B and 234C.
- Estimated annual income projected each quarter
- Interest exposure monitored and minimised where possible
Year-on-year comparison between the old and new tax regimes, factoring in an individual's specific deductions, exemptions, and income profile to identify the more favourable option.
- Both regimes computed side-by-side for comparison
- Recommendation provided ahead of the filing deadline
The Filing Process
Submit Enquiry
Share your requirement through the website or by phone. The firm reviews it and responds during office hours with next steps.
Document Collection
Relevant documents are collected based on your entity type and income sources, following the checklist confirmed for your specific situation.
Computation & Review
Income is computed under every applicable head, with eligible deductions and exemptions applied before the return is finalised for your review.
Filing & Confirmation
The return is filed within the statutory due date, and the filing acknowledgment along with the computation summary is shared with you.
Verified. Processed. Resolved.
Every filed return moves through e-verification, departmental processing, and — where applicable — refund or query resolution.
Turning a Plan Into a Filed Return
Tax planning carried out during the year feeds directly into the return filed after the financial year closes — the deductions claimed, the regime selected, and the capital gains reported should all reflect decisions already understood and, where relevant, already acted upon. This reduces the likelihood of last-minute adjustments or missed opportunities at the point of filing.
Where circumstances change during the year — a job change, a property sale, a new investment — tax planning should be revisited promptly rather than left until the return is being prepared, since several provisions carry timing conditions that cannot be satisfied retroactively.
Documents You'll Need
Document requirements for a tax planning review vary depending on the specific decisions being considered, but the checklist below covers what's typically useful to have on hand. Click each item as you gather it — the tracker above updates as you go. This is a preparation aid only; submitting an enquiry will confirm what's relevant to your specific situation.
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Frequently Asked Questions
What is the difference between tax planning and tax evasion?
Tax planning involves making use of deductions, exemptions, and provisions explicitly provided under the Income-tax Act, while tax evasion involves illegally concealing income or falsifying claims; the two are fundamentally different in both method and legality.
When should tax planning ideally begin for a financial year?
Tax planning is generally most effective when it begins early in the financial year, since several provisions carry timing conditions and benefit from decisions made well ahead of the filing deadline.
Can the choice of tax regime be changed every year?
Salaried individuals can generally choose between the old and new regime each year at the time of filing, while individuals with business income face certain restrictions on switching between regimes.
What happens if advance tax is underpaid during the year?
Underpayment of advance tax can result in interest under Sections 234B and 234C, calculated on the shortfall between the tax actually paid and the tax that ought to have been paid by each instalment date.
Is tax planning only relevant for high-income individuals?
No, tax planning principles such as regime selection and deduction utilisation are relevant to taxpayers across income levels, though the specific strategies that apply will vary based on individual circumstances.
Can capital gains tax be avoided entirely through reinvestment?
Reinvestment provisions under Sections 54, 54F, and 54EC can provide exemption from capital gains tax, but each carries specific conditions, monetary limits, and timelines that must be satisfied for the exemption to apply.
Does tax planning apply to HUFs as well as individuals?
Yes, a Hindu Undivided Family is treated as a separate taxable entity under the Income-tax Act and has its own set of available deductions and exemptions, distinct from those of its individual members.
What role does the Finance Act play in tax planning?
The Finance Act, passed annually, can amend tax slabs, deduction limits, and other provisions, meaning tax planning approaches generally need to be reviewed each year against the current year's applicable provisions.
Have a Query About Tax Planning?
Submit an enquiry and the firm will respond during office hours. Engaging the firm for this service begins with a formal engagement following your enquiry.