Tax Planning Made Easy: 5 Tips for a Stress-free 2023

27 Jun 2022 | Finance, Information

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Hooshang Bakht

Brego Business was started with a mission to make entrepreneurship easy. Our goal is to help business owners grow and scale without having to deal with the day-to-day stress of running a business. We specialize in providing services that help business owners grow their businesses, including Digital Marketing, search engine marketing (SEM), social media marketing (SMM), LinkedIn marketing, video production, accounts receivable (AR), accounts payable (AP), internal audit, VCFO, and recruitment. We have helped more than 500 brands grow their businesses. We work closely with clients to understand their unique needs and develop customized strategies that deliver measurable results.

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Tax‌ ‌Planning‌

Financial tax planning offers numerous tax benefits that can help you save money and increase your financial security. By taking financial measures to decrease your tax liability, you can save on tax payments and invest the saved amount in plans that earn you more money, many of which come with additional tax benefits. You can avail of deductions, exemptions, and rebates permitted under the Income Tax Act to reduce your tax burden. However, the language used to explain these provisions is often full of financial and legal jargon that can be difficult to understand. To help you navigate this complex landscape, we have compiled some simple financial tax planning suggestions that can help you reduce your tax burden and increase your financial security.

Steps of Tax Planning

Let us look at the basic information needed to start your tax planning journey.

Calculation of Total Annual Income

Calculate your total annual income. This includes income from salary, business, rental income, interest earned on deposits and saving schemes, capital gains income, cash gifts other than family members, or income gained from any other sources.

Calculation of Taxable Income

Financial tax planning involves calculating your taxable income to determine the income on which you need to pay taxes. Luckily, there are several tax benefits available that can help reduce your tax liability. To calculate your taxable income, you can start by deducting Rs 2.5 lakhs from your total annual income, as tax liability on that amount is zero. Next, you can remove tax-free incomes such as the interest generated on PPF accounts and interest up to Rs 10,000 on savings accounts, among other tax benefits. By utilizing these strategies, you can reduce your taxable income and pay less tax, ultimately leading to more savings and increased financial security.

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The Tax Slab

It means the amount of tax needed to pay as per the tax slab or tax bracket you come under. These slabs are given below.

  • Up to Rs 2.5 lakhs – Zero tax liability. No tax to be paid.
  • Up to Rs 5 lakhs – Rebate on the tax liability of Rs 12,500 under section 87A. No tax to be paid.
  • Between Rs 5 lakhs to Rs 7.5 lakhs – Tax liability of Rs 12,500 and add 10% on amounts more than 5 lakhs. Add these two and further include 4 percent health and education cess on the total amount.
  • Between Rs 7.5 lakhs to Rs 10 lakhs – Tax liability of Rs 37,500 and add 15% on the amount that is more than Rs. 7.5 lakhs. Add these two and further include 4 percent health and education cess on the total amount.
  • Between Rs 10 lakhs to Rs 12.5 lakhs – Tax liability of Rs 75,000 and add 20% on the amount that is more than Rs. 10 lakh. Add these two and further include 4 percent health and education cess on the total amount.
  • Above Rs 15 lakhs – Tax liability of Rs 1,87,500 and add 30% of the amount that is more than 15 lakhs. Add these two and further include 4 percent health and educational cess on the total amount.

Tips for Saving Tax

Let us check how to save tax under different sections of the Income Tax Act.

Utilizing Section 80C

The government of India allows deduction of up to Rs 1.5 lakh to be invested in specific saving schemes and instruments under Section 80C of the Income Tax Act. This is done to encourage the saving habits of Indian citizens. Some popular instruments you can invest in are as below.

  • Public Provident Fund (PPF) accounts
  • Equity Linked Saving Schemes
  • 5-year tax-saving deposits
  • Pension plans
  • Life insurance policies
  • ULIPS (Unit Linked Insurance Plans)- For meeting insurance and investment needs.

By investing in these schemes, you can save tax and meet your future financial goals.

Utilizing Section 80CCD(1B)

Investing in the National Pension Scheme (NPS) is an excellent strategy for financial tax planning, offering several tax benefits. By investing in NPS, you can claim a deduction of Rs 50,000 under Section 80CCD(1B) of the Income Tax Act, in addition to the Rs 1.5 lakh deduction available under Section 80C. This means that you can claim a deduction of up to Rs 2 lakhs under these two sections, thereby reducing your taxable income and availing significant tax benefits. NPS invests your money in various debts and equity funds, offering high returns over the long term. On maturity, you can receive a portion of the amount as an annuity, which is taxable, and the rest as regular payments. Overall, NPS offers attractive tax benefits and can help increase your financial security in the long run.

Utilizing Section 80G

You can donate to your favorite charitable institutions and claim deductions up to 10 percent on your income under Section 80G of the Income Tax Act. But the institution should have an income-tax exemption certificate. Get a receipt of the donation and a copy of the income-tax exemption certificate for availing of the income tax deduction.

Utilizing Section 80D

Tax planning and health insurance are two important aspects of financial tax planning, and you can avail of both by utilizing Section 80D of the Income Tax Act, which offers attractive tax benefits. By utilizing this section, you can claim a deduction of up to Rs 25,000 for health insurance premiums paid for yourself, your spouse, and your children. Additionally, you can claim an additional deduction of Rs 25,000 for medical insurance premiums paid for your parents who are younger than 60 years. These tax benefits can help you save money and reduce your taxable income, thereby improving your financial tax planning. However, it’s important to note that these deductions do not include medical bills. By availing of health insurance and utilizing Section 80D of the Income Tax Act, you can not only secure your health but also increase your financial security.

Utilizing Section 10(13A)/ Section 80GG

House rent allowance (HRA) can be an essential aspect of financial tax planning for salaried employees, as you can claim a deduction on rent paid for your residential premises under Section 10(13A) of the Income Tax Act if you have HRA as a salary component. Self-employed individuals can also claim a deduction on rent through Section 80GG of the Income Tax Act. By utilizing these sections, you can reduce your taxable income and save money, which is an important aspect of financial tax planning. Therefore, if you are a salaried employee or self-employed and pay rent for your residential premises, you should consider utilizing the relevant section to claim a deduction on your tax returns.


Looking for financial tax planning suggestions for 2021? Use these recommendations to legally save on taxes and retain more of your hard-earned money. By implementing these strategies, you can invest in a secure financial future.

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Frequently asked questions

What is financial tax planning?

Financial tax planning is the process of managing your finances in such a way that minimizes the impact of taxes on your income and wealth.

How can tax planning help me save money?

Tax planning can help you save money by maximizing your deductions and credits, minimizing your tax liability, and taking advantage of tax benefits and incentives.

When should I start tax planning?

Tax planning should ideally start at the beginning of each financial year, or as soon as possible if you have missed that deadline. It is best to plan ahead and make informed decisions based on your financial goals.

What are some common tax benefits that I can take advantage of?

There are many tax benefits available to individuals and businesses, including deductions for charitable contributions, mortgage interest, and retirement contributions, as well as credits for education expenses and dependent care costs.

How can I make sure I am taking advantage of all the tax benefits available to me?

Working with a financial advisor or tax professional can help you identify all the tax benefits that you are eligible for and develop a comprehensive tax planning strategy that maximizes your savings.

Can tax planning help me reduce my overall tax liability?

Yes, tax planning can help you reduce your overall tax liability by minimizing taxable income, claiming deductions, and taking advantage of tax credits and incentives.

Is tax planning only for the wealthy?

No, tax planning is for everyone who wants to manage their finances in a smart and efficient way. Regardless of your income level, tax planning can help you save money and achieve your financial goals.

Can I do tax planning on my own, or should I consult a professional?

While you can do tax planning on your own, it is often helpful to consult a professional such as a tax accountant or financial advisor. They can provide guidance on complex tax issues and help you make informed decisions.

How often should I review my tax plan?

It is recommended to review your tax plan annually, or whenever there are major changes in your income or financial situation.

What are the consequences of not doing tax planning?

Not doing tax planning can result in paying more taxes than necessary and missing out on tax benefits and incentives. It can also lead to missed opportunities to achieve your financial goals.

Tax planning is an essential part of financial planning. It can help you save money, reduce your tax liability, and maximize your tax benefits. However, tax laws are constantly changing, and it can be challenging to keep up with the latest regulations. Here are five tips for the perfect tax planning in 2021.

  1. Know your tax bracket: Understanding your tax bracket is essential to determine the tax rate you will pay on your income.
  1. Contribute to your retirement accounts: Contributions to your retirement accounts, such as a 401(k) or an IRA, can reduce your taxable income and lower your tax liability.
  2. Take advantage of tax deductions: Tax deductions, such as charitable contributions, can reduce your taxable income and increase your tax benefits.
  1. Review your investment portfolio: Review your investment portfolio to minimize taxes on capital gains and to take advantage of tax-efficient investments.
  1. Consult with a tax professional: Consulting with a tax professional can help you identify additional tax benefits and ensure compliance with tax regulations.

At Brego Business Digital Marketing Services, we help our clients with financial tax planning and tax benefits. Our team of experienced tax professionals provides expert guidance on tax planning strategies that can help you maximize your tax benefits and minimize your tax liability.

We work with our clients to create personalized tax plans that align with their financial goals and objectives. From individual tax planning to business tax planning, we help our clients optimize their tax position and achieve their financial objectives.

If you're looking for help with tax planning, contact Brego Business Digital Marketing Services. Our team of tax experts is here to help you create a tax plan that works for you.

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