Tax Planning

Choice between the default and optional tax regimes for individuals and HUFs is governed by Section 115BAC of the Income Tax Act, 1961.

New (default) regime slab structure: Under the current slab rates applicable to the new regime, income up to ₹4,00,000 is taxed at nil rate, with subsequent slabs taxed progressively from 5% up to a maximum marginal rate of 30% on income above the highest slab. A standard deduction of ₹75,000 is available against salary/pension income under the new regime.

Section 87A rebate: Resident individuals with total income up to ₹12,00,000 are eligible for a rebate under Section 87A that reduces tax liability under the new regime to nil (for salaried taxpayers, the effective no-tax threshold rises to approximately ₹12,75,000 after the ₹75,000 standard deduction). The rebate does not extend to income taxed at special rates, such as long-term capital gains under Section 112A.

Old regime: Taxpayers may continue to compute tax under the pre-existing slab structure and deduction regime (Chapter VI-A deductions, HRA, LTA, home loan interest under Section 24(b), etc.) by exercising the option in the manner prescribed — for individuals/HUFs with business or professional income, this requires filing FORM 10-IC/10-IE as applicable and is subject to the opt-out restrictions under Section 115BAC(6).

Default treatment: Since Finance Act 2023, the new regime under Section 115BAC is the default regime for all individuals/HUFs; the old regime applies only where explicitly opted for in the return of income.

This service compares tax outcomes under both regimes and structures the annual regime election.

Tax planning is the lawful structuring of a taxpayer's affairs to minimise the tax under the Income-tax Act 1961 — the planning of the income and the deductions, the investments in the tax-advantaged instruments under Chapter VI-A and Sections 10 and 54, the choice between the tax regimes, the timing of the income and the expenses, and the structure of the business and the personal positions. The planning is the difference between the tax the law requires and the tax the taxpayer actually pays, and it is the discipline of the annual financial decisions.

The tax planning is the annual work of the taxpayer's decisions — the salary and the business structures, the investments and the deductions, the capital gains and the exemptions, the advance tax and the regimes — each a choice that moves the tax, and each documented so the position holds at the assessment. The planning is lawful by definition: it works within the Act, not around it.

The cost of unplanned tax is the overpayment: the deductions unused, the exemptions missed, the regime chosen wrong, the gains realised without the planning — each a tax the law did not require the taxpayer to pay.

This service is for individuals, businesses and entities planning their tax. We map the year's income and the positions, plan the deductions and the exemptions under Chapter VI-A and Sections 10 and 54, choose between the tax regimes and the structures, plan the timing of the income and the expenses and the advance tax, and document the plan — so the taxpayer pays the minimum the law allows, with the records to support it.