Page 78 - DCOM508_CORPORATE_TAX_PLANNING

Unit 3: Corporate Tax Planning

(c) Employer should furnish to the employee a certificate regarding TDS. Notes

(d) Employer should furnish quarterly and annual returns regarding TDS.
2. Payment of Tax on the basis of following:
(a) Advance payment of tax.
(b) Tax on Self Assessment
(c) Payment on Demand
3. Audit of Accounts on the basis of the following:

(a) If business income exceeds 40 lakhs.
(b) If business income exceeds 10 lakhs.
4. Fulfilment of conditions to claim deductions.

5. Furnishing return of income.

6. Documentation and maintenance of records.
7. Review of Orders.

3.5.3 Difference between Tax Planning and Tax Management

While tax planning and tax management correlate with each other, the two aspects of taxes have
several differences. The primary difference between tax planning and tax management is the
time frame in which each part is conducted. The tax planning takes place ahead of time, while
the tax management is the implementation of the plan.
The first primary difference between tax planning and tax management is the requirements.

While tax planning is not a requirement for either a business or individual, tax management is
a requirement. Every individual and business in the United States is required to manage taxes,

which includes filing the appropriate state and federal tax returns.
The second primary difference between tax planning and tax management is about tax liability.
When a business or individual goes through the tax planning process, they are trying to minimise
the tax liability of the entity by planning deductions, purchases and expenses ahead of time. Tax
management, however, involves making sure that when the tax plan is implemented, that it is
according to the tax laws and regulations.
The third difference between tax planning and tax management pertains to liabilities. Tax
planning involves taking the actions necessary to minimise the tax liabilities of the business or
the individuals. Tax management on the other hand is about avoiding the payment of interest or
fees for not abiding by the tax laws and regulations.

The fourth difference between tax planning and tax management is the time frame. Tax planning
is an action that is taken in the present but relates to the future. Tax management, on the other
hand, encompasses the past, present and future. This includes tracking past sales, deductions,
assets and more, making current tax payments and preparing tax documents for any future
payments that must be made.

While there are plenty of differences between tax planning and tax management, there is also
one primary similarity. The primary similarity between tax planning and tax management is that
tax planning is a subset, or a part, of tax management. When an individual or business is in the
process of tax planning, they are also taking into account all of the aspects of tax management,

including tax deductions, proper auditing of the accounting files and records, putting together

and filing the tax return documents on time and planning for tax scenarios that may come up
during that particular tax year.

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