Department of Management Studies

Title of the seminar

James Roshan S
1NT22BA092

Internal Guide Name: Rashmi M J

Designation and Affiliation: Assistant Professor

5-3-2024
Introduction
• Tax planning is the strategic process of organizing financial activities
to minimize tax liability and optimize overall financial success. By
understanding tax structures, deductions, and credits, individuals and
businesses aim to preserve wealth and maximize after-tax income.
Dispelling misconceptions, exploring different types of tax planning,
and adapting to evolving regulations ensure individuals and businesses
make informed decisions for long-term financial well-being.
Background/ History
• Taxation has deep roots in human civilization, dating back to ancient
societies where rulers levied taxes on their subjects in various forms such as
labor, crops, or goods. Throughout history, taxation has evolved in response
to the needs of expanding governments and changing economic landscapes.
Feudal systems in the Middle Ages relied on taxes collected from peasants
to sustain the ruling class and support local governance. The modern
concept of taxation emerged in the 17th and 18th centuries with the rise of
centralized nation-states, which required stable revenue sources for funding
wars and administrative functions. Today, taxation remains a fundamental
tool for governments to finance public services, redistribute wealth, and
regulate economies, albeit facing new challenges in the digital age and
globalization.
Review of Literature
• Legal compliance
• Economic impact
• Ethical consideration
• Corporate strategies
• Regulatory framework
Importance
• Maximum Tax Efficiency
• Financial goal alignment
• Cash flow management
• Long term financial security
• Risk management
Latest development
Case study
• Background: Sarah is a 35-year-old professional working as a
freelance graphic designer. She earns income through project-based
work and is considered self-employed. Sarah is proactive about
managing her finances and wants to optimize her tax position while
ensuring compliance with tax regulations. Current situation: Sarah's
income primarily comes from freelance graphic design projects. She
has a gross annual income of 8,90,000 rupees. Sarah incurs various
business-related expenses, including software subscriptions,
equipment purchases, and a home office set up. As a self-employed
individual, Sarah reports her business income and expenses on
Schedule C of her personal tax return.
Computation of taxable amount with two different tax slabs

• OLD TAX SLAB:

• Sarah as 8,90,000 as gross annual income 1) 0 - 2.5 lakhs: NILL 2) 2.5
- 5 lakhs: 5 % 250,000x 5%= 12,500 3) 5 - 10 lakhs: 20% 3,90,000x
20%= 78,000 According to old tax slabs Sarah has to pay 90,500
rupees
• NEW TAX SLAB:
• Sarah as 8,90,000 as gross annual income 1) 0 - 3 lakhs: NILL 2) 3 - 6
lakhs: 5 % 3,00,000x 5%= 15,000 3) 6 - 9 lakhs: 10% 2,90,000x
10%= 29,000 According to new tax slabs Sarah has to pay 44,000
rupees
30/05/2024
Conclusion
• Tax planning is a vital financial strategy that individuals and
businesses employ to optimize their tax positions within the bounds of
the law. The key objectives of tax planning include minimizing tax
liabilities, optimizing cash flow and ensuring compliance with tax
regulations. Tax planning involves a range of considerations, such as
taking advantage of exemptions, deductions, and credits, as well as
making informed decisions about investments, expenses, and business
structures.
Thank you

30/05/2024