Income Tax Planning in India with respect to Individual Assessee MBA Project

Abstract
Income Tax Act, 1961 governs the taxation of incomes generated within India and of incomes generated by Indians overseas. This study aims at presenting a lucid yet simple understanding of taxation structure of an individual’s income in India for the assessment year 2007-08.

Income Tax Act, 1961 is the guiding baseline for all the content in this report and the tax saving tips provided herein are a result of analysis of options available in current market. Every individual should know that tax planning in order to avail all the incentives provided by the Government of India under different statures is legal.

This Income Tax Planning in India with respect to Individual Assessee MBA Project
covers the basics of the Income Tax Act, 1961 as amended by the Finance Act, 2007 and broadly presents the nuances of prudent tax planning and tax saving options provided under these laws. Any other hideous means to avoid or evade tax is a cognizable offense under the Indian constitution and all the citizens should refrain from such acts.

Need for Study

In last some years of my career and education, I have seen my colleagues and faculties grappling with the taxation issue and complaining against the tax deducted by their employers from monthly remuneration. Not equipped with proper knowledge of taxation and tax saving avenues available to them, they were at mercy of the HR/Admin departments which never bothered to do even as little as take advise from some good tax consultant.

This prodded me to study this aspect leading to this project during my MBA course with the university, hoping this concise yet comprehensive write up will help this salaried individual assessee class to save whatever extra rupee they can from their hard-earned monies.

Objectives

•    To study taxation provisions of The Income Tax Act, 1961 as amended by Finance Act, 2007.
•    To explore and simplify the tax planning procedure from a layman’s perspective.
•    To present the tax saving avenues under prevailing statures.

Scope & Limitations

•    This project studies the tax planning for individuals assessed to Income Tax.
•    The study relates to non-specific and generalized tax planning, eliminating the need of sample/population analysis.
•    Basic methodology implemented in this study is subjected to various pros & cons, and diverse insurance plans at different income levels of individual assessees.
•    This study may include comparative and analytical study of more than one tax saving plans and instruments.
•    This study covers individual income tax assessees only and does not hold good for corporate taxpayers.
•    The tax rates, insurance plans, and premium are all subject to FY 2007-08 only.

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