1.

Short-range and long-range Tax Planning: The tax planning which is made
every year to arrive at specific or limited objectives, is called short-range tax
planning. Conversely, long-range tax planning alludes to such practices undertaken
by the assessee which are not paid off immediately.
2. Permissive Tax Planning: Tax planning, wherein the planning is made as per
expressed provision of the taxation laws is termed as permissive tax planning.
3. Purposive Tax Planning: Purposive tax planning refers to the tax planning method
which misleads the law. Under this type, there is no expressed provision of the
statute.

Tax planning means intelligently applying tax provisions to manage an

individual’s affairs, in order to avail the tax benefits based on the national
priorities, in accordance with the interest of general public and
government.

Types of planning discussed above

Objectives of tax planning

 Reduction of Tax Liability: An assessee can save the maximum amount of tax,
by properly arranging his/her operations as per the requirements of the law,
within the framework of the statute.
 Minimization of Litigation: There is a war-like situation between the taxpayers
and tax collectors as the former wants the tax liability to be minimum while the
latter attempts to extract the maximum. So, a proper tax planning aims at
conforming to the provisions of the tax law, in such a way that incidence of
litigation is minimized.
 Productive Investment: One of the major objective of tax planning is
channelisation of taxable income to different investment plans. It aims at the
optimum utilization of resources for productive causes and relieving the assessee
from tax liability.
 Healthy Growth of Economy: The growth and development of the economy
greatly depend on the growth of its citizens. Tax planning measures involve
generating white money that flows freely and results in the sound progress of the
economy.
 Economic Stability: Proper tax planning brings economic stability by various
techniques such as mobilizing resources for national projects or availing ways for
investments which are productive in nature.

Tax Planning follows an honest approach, to achieve maximum benefits of

tax laws, by applying the script and moral of law. Therefore the objectives
do not in any way contradict the concept of tax laws