| name | tax-planning |
| description | Year-round tax planning for individuals and businesses. Covers old vs new regime comparison, Section 80C-80U deductions, business expenditure planning, timing of income/expenditure, HUF planning, family tax planning, and year-end tax saving strategies. Also covers corporate tax planning (MAT, ITAT favourable precedents).
|
| when_to_use | When a client wants to minimise tax outflow legally, comparing old vs new income tax regime, or planning investments for Section 80C/80D deductions.
|
| effort | medium |
| model | claude-sonnet-4-6 |
| allowed-tools | ["mcp__memory_bank__get_client","mcp__memory_bank__get_firm_profile","Read"] |
Tax Planning — Individual and Business
FINANCIAL INTEGRITY: All tax planning must be within the framework of law — GAAR (General Anti-Avoidance Rules, Section 95-102) can disallow arrangements entered into primarily for tax benefit. Document the commercial purpose of all planning structures.
Individual Tax Planning
Old Regime vs New Regime Comparison
Old Regime: All deductions allowed (80C, HRA, 80D, etc.) — beneficial if total deductions > Rs.3.75 lakh (roughly).
New Regime (Section 115BAC as amended from FY 2023-24):
| Slab | Rate |
|---|
| 0 – Rs.3,00,000 | Nil |
| Rs.3,00,001 – Rs.7,00,000 | 5% |
| Rs.7,00,001 – Rs.10,00,000 | 10% |
| Rs.10,00,001 – Rs.12,00,000 | 15% |
| Rs.12,00,001 – Rs.15,00,000 | 20% |
| Above Rs.15,00,000 | 30% |
| Rebate u/s 87A: Tax nil if income ≤ Rs.7 lakh (new regime) | ≤ Rs.5 lakh (old) |
| Standard deduction: Rs.75,000 (new regime from FY 2024-25) | Rs.50,000 (old) |
REGIME COMPARISON:
Income: Rs.[X]
Old Regime New Regime
Gross Income : Rs.X Rs.X
Deductions (80C etc): (Rs.X) Not applicable
Taxable Income : Rs.X Rs.X (less Std deduction only)
Tax : Rs.X Rs.X
Recommendation : [Old / New regime saves Rs.X]
Section 80 Deductions Planner
| Section | Deduction | Limit | Action |
|---|
| 80C | LIC, PPF, ELSS, EPF, FDs (5yr), children's tuition | Rs.1,50,000 | Invest by 31 March |
| 80CCD(1B) | NPS additional | Rs.50,000 | Invest by 31 March |
| 80D | Medical insurance premium | Rs.25,000 (self) + Rs.50,000 (parents 60+) | Renew policy before March 31 |
| 80G | Donations | 50%-100% of donation | Donate to eligible NGOs |
| 80TTA | Bank savings interest | Rs.10,000 | Monitor savings account interest |
| 80TTB | Senior citizens' bank interest | Rs.50,000 | If age 60+ |
| 80U | Disability — self | Rs.75,000–Rs.1,25,000 | If person with disability |
Business Tax Planning
For Firms / LLPs / Companies:
- Timing of revenue: Recognize income in year with lower tax rate
- Capital expenditure: Section 32 depreciation — accelerated for new assets, additional depreciation 20% in first year (manufacturing companies, power sector)
- Section 43B deductions: Actually paid — PF, bonus, gratuity, MSME payments. Ensure payment before year end.
- Scientific Research: 100% deduction u/s 35(1)(i); 150% for approved research associations
- Startup deductions: 3-year tax holiday u/s 80-IAC (DPIIT-recognized startups)
HUF Tax Planning
If client is a Hindu Undivided Family (HUF):
- Separate PAN + separate tax slab benefits
- Salary to karta if managing HUF business — legitimate deduction
- Section 80C investments in HUF name — additional Rs.1.5 lakh limit
- Caution: Section 64 clubbing — genuinely transferring assets required
Year-End Checklist (February-March)
TAX PLANNING — YEAR END CHECKLIST
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[ ] 80C investments made — target Rs.1,50,000 (ELSS/LIC/PPF)
[ ] NPS contribution made — target additional Rs.50,000 (80CCD(1B))
[ ] Medical insurance premium paid (self + family + parents)
[ ] Any capital losses to be harvested (sell loss-making investments)
[ ] Home loan repayment — 80C (principal) + 24(b) (interest)
[ ] Advance tax — final instalment by 15 March
[ ] Section 43B payments — bonus, PF arrears etc. paid before 31 March
[ ] Any tax planning transactions properly documented
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