{"id":14482,"date":"2025-07-18T09:09:01","date_gmt":"2025-07-18T09:09:01","guid":{"rendered":"https:\/\/lxme.in\/?p=14482"},"modified":"2025-08-01T11:50:50","modified_gmt":"2025-08-01T11:50:50","slug":"difference-between-tax-planning-and-tax-management","status":"publish","type":"post","link":"https:\/\/lxme.in\/v1\/difference-between-tax-planning-and-tax-management\/","title":{"rendered":"Difference Between Tax Planning and Tax Management"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_75 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/lxme.in\/v1\/difference-between-tax-planning-and-tax-management\/#What_is_Tax_Planning\" >What is Tax Planning?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/lxme.in\/v1\/difference-between-tax-planning-and-tax-management\/#Old_Tax_Regime\" >Old Tax Regime:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/lxme.in\/v1\/difference-between-tax-planning-and-tax-management\/#New_Tax_Regime\" >New Tax Regime:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/lxme.in\/v1\/difference-between-tax-planning-and-tax-management\/#Choosing_Between_the_Old_vs_New_Tax_Regime_for_FY_2024-25\" >Choosing Between the Old vs New Tax Regime for FY 2024-25*<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/lxme.in\/v1\/difference-between-tax-planning-and-tax-management\/#What_is_Tax_Management\" >What is Tax Management?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/lxme.in\/v1\/difference-between-tax-planning-and-tax-management\/#Difference_Between_Tax_Planning_and_Tax_Management\" >Difference Between Tax Planning and Tax Management<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/lxme.in\/v1\/difference-between-tax-planning-and-tax-management\/#A_Case_Study_Priyas_Simple_Tax_Journey\" >A Case Study: Priya\u2019s Simple Tax Journey<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/lxme.in\/v1\/difference-between-tax-planning-and-tax-management\/#Conclusion\" >Conclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/lxme.in\/v1\/difference-between-tax-planning-and-tax-management\/#FAQs\" >FAQs<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/lxme.in\/v1\/difference-between-tax-planning-and-tax-management\/#What_is_the_main_difference_in_tax_planning_vs_tax_management\" >What is the main difference in tax planning vs tax management?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/lxme.in\/v1\/difference-between-tax-planning-and-tax-management\/#How_does_effective_tax_planning_reduce_my_tax_liabilities\" >How does effective tax planning reduce my tax liabilities?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/lxme.in\/v1\/difference-between-tax-planning-and-tax-management\/#Can_tax_management_strategies_help_avoid_penalties\" >Can tax management strategies help avoid penalties?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/lxme.in\/v1\/difference-between-tax-planning-and-tax-management\/#Is_tax_planning_applicable_to_salaried_individuals_under_the_new_regime\" >Is tax planning applicable to salaried individuals under the new regime?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n\n<p>Many of us, feel that tax-related strategies are only for big businesses or the super-rich. But, as women managing households, careers, and financial independence, understanding tax planning in wealth management is a powerful tool for wealth creation. Let\u2019s break down the difference between tax planning and tax management in a way that\u2019s simple, practical, and relevant for us all.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Tax_Planning\"><\/span>What is Tax Planning?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Tax planning is the process of structuring&nbsp; your financial affairs to reduce your tax liabilities in the future. It\u2019s a forward-thinking strategy that focuses on lowering your tax burden legally and efficiently. Consider&nbsp; it as a roadmap that helps you save money while ensuring you stay compliant with tax laws.<\/p>\n\n\n\n<p>In India, you currently have the option to choose between the old and new tax regimes, and understanding the differences is key to effective tax planning.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Old_Tax_Regime\"><\/span><strong>Old Tax Regime:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Under the old tax regime, you can claim deductions and exemptions such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A standard deduction of <strong>\u20b950,000.<\/strong><\/li>\n\n\n\n<li>HRA (House Rent Allowance).<\/li>\n\n\n\n<li>LTA (Leave Travel Allowance).<\/li>\n\n\n\n<li>Deductions under Sections <strong>80C<\/strong> (for investments), <strong>80D<\/strong> (for medical insurance premiums), and others.<\/li>\n<\/ul>\n\n\n\n<p>These deductions allow you to reduce your taxable income significantly. However, this regime has higher tax rates compared to the new regime.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"New_Tax_Regime\"><\/span><strong>New Tax Regime:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The new tax regime simplifies the tax filing process with lower tax rates, but it removes the majority of exemptions and deductions (over 70 of them, including HRA, LTA, and 80C). However, there are a few benefits, such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A standard deduction of <strong>\u20b975,000(increased from \u20b950,000).&nbsp;<\/strong><\/li>\n\n\n\n<li>Deductions on home loan interest for the let-out property.<\/li>\n\n\n\n<li>Employer&#8217;s contribution to NPS (National Pension Scheme).<\/li>\n<\/ul>\n\n\n\n<p>The new regime is more suited for individuals who don\u2019t have many deductions or exemptions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Choosing_Between_the_Old_vs_New_Tax_Regime_for_FY_2024-25\"><\/span>Choosing Between the Old vs New Tax Regime for FY 2024-25*<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Choosing between the old and new tax regimes can be simplified based on your total deductions. For example:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>When total deductions are \u20b91.5 lakh or less:<\/strong> The new tax regime is typically more beneficial due to lower tax rates.<\/li>\n\n\n\n<li><strong>When total deductions exceed \u20b93.75 lakh:<\/strong> The old tax regime is likely better, as the higher deductions will significantly reduce your taxable income.<\/li>\n<\/ul>\n\n\n\n<p>However, one should calculate tax under both regimes and then decide which would benefit them and align with their financial goal.<\/p>\n\n\n\n<p>Remember, the new tax regime will be the default option from FY 2023-24, however, the old tax regime can be opted if required.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Tax_Management\"><\/span>What is Tax Management?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Tax management, on the other hand, is all about obedience. It is a reactive strategy because it focuses on handling taxes after the income is earned. It involves actions like filing tax returns, ensuring compliance with tax laws, and paying the correct amount of tax on time.&nbsp;<\/p>\n\n\n\n<p>In other words, it deals with managing taxes based on what has already happened financially, rather than planning ahead to minimize tax liability.<\/p>\n\n\n\n<p>Example:<\/p>\n\n\n\n<p>If you fail to file your ITR by July 31, you could face penalties of up to \u20b910,000, depending on the delay. Proper tax management ensures you avoid such unnecessary costs.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Difference_Between_Tax_Planning_and_Tax_Management\"><\/span><strong>Difference Between Tax Planning and Tax Management<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Aspect<\/strong><\/td><td><strong>Tax Planning<\/strong><\/td><td><strong>Tax Management<\/strong><\/td><\/tr><tr><td><strong>Objective<\/strong><\/td><td><strong>Reduce tax liability legally.<\/strong><\/td><td><strong>Ensure compliance with tax laws.<\/strong><\/td><\/tr><tr><td><strong>Focus<\/strong><\/td><td><strong>Proactive: Choosing investments, regimes, etc.<\/strong><\/td><td><strong>Reactive: Meeting deadlines, filing returns.<\/strong><\/td><\/tr><tr><td><strong>Timing<\/strong><\/td><td><strong>Involves planning actions before or during the year.<\/strong><\/td><td><strong>Involves actions taken after the financial year to settle obligations.<\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"A_Case_Study_Priyas_Simple_Tax_Journey\"><\/span>A Case Study: Priya\u2019s Simple Tax Journey<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Priya, a 35-year-old working mom earning \u20b910,00,000 annually, decided to take charge of her taxes. With the help of LXME\u2019s tools, she carefully compared the old and new tax regimes. Priya discovered that the new regime\u2019s lower tax rates were more suitable for her financial situation.<\/p>\n\n\n\n<p>Her total deductions were \u20b92.4 lakhs(1.5 lakhs-80C, 25000-80D,15000-80G and 50000-80CCD), so the new tax regime was the smarter choice.<\/p>\n\n\n\n<p><strong>Tax payable under the old regime:<\/strong> \u20b956,680<br><strong>Tax payable under the new regime:<\/strong> \u20b944,200<\/p>\n\n\n\n<p>By opting for the new regime and filing her returns on time, Priya saved \u20b912,000 in taxes and avoided a \u20b95,000 penalty for late filing. This decision made Priya feel more confident and stress-free, showing how easy tax planning and management can be when approached strategically.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>For a woman trying for financial independence, both tax planning and tax management are essential. Tax planning in wealth management helps you grow your money, while tax management ensures you\u2019re not losing money to fines or late payments. Together, they create a balanced approach to handling taxes.<\/p>\n\n\n\n<p>At Lxme, we\u2019re here to support women on their financial journeys. Explore our tools and resources to simplify your taxes and grow your wealth.<\/p>\n\n\n\n<p>Got questions or tips about managing taxes? Share them in the comments below and let\u2019s empower each other!<\/p>\n\n\n\n<p>Also, check out empowering and strong <a href=\"https:\/\/lxme.in\/15-successful-entrepreneurs-in-india\/\">female entrepreneurs in India&nbsp;<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs\"><\/span>FAQs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-question-1738062891634\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"What_is_the_main_difference_in_tax_planning_vs_tax_management\"><\/span><strong>What is the main difference in tax planning vs tax management?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Tax planning is about reducing your tax liabilities legally, while tax management ensures compliance with tax laws and deadlines.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1738062909307\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"How_does_effective_tax_planning_reduce_my_tax_liabilities\"><\/span><strong>How does effective tax planning reduce my tax liabilities?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>By understanding tax laws and selecting the right regime or investments, tax planning helps minimize the amount you owe.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1738062925946\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"Can_tax_management_strategies_help_avoid_penalties\"><\/span><strong>Can tax management strategies help avoid penalties?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Yes, timely tax payments and accurate filing can help you avoid late fees and interest charges.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1738062942995\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"Is_tax_planning_applicable_to_salaried_individuals_under_the_new_regime\"><\/span><strong>Is tax planning applicable to salaried individuals under the new regime?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Yes, salaried individuals can still plan by comparing the old and new tax regimes to decide which is better for them.<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n<script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"FAQPage\",\n  \"mainEntity\": [{\n    \"@type\": \"Question\",\n    \"name\": \"What is the main difference in tax planning vs tax management?\",\n    \"acceptedAnswer\": {\n      \"@type\": \"Answer\",\n      \"text\": \"Tax planning is about reducing your tax liabilities legally, while tax management ensures compliance with tax laws and deadlines.\"\n    }\n  },{\n    \"@type\": \"Question\",\n    \"name\": \"How does effective tax planning reduce my tax liabilities?\",\n    \"acceptedAnswer\": {\n      \"@type\": \"Answer\",\n      \"text\": \"By understanding tax laws and selecting the right regime or investments, tax planning helps minimize the amount you owe.\"\n    }\n  },{\n    \"@type\": \"Question\",\n    \"name\": \"Can tax management strategies help avoid penalties?\",\n    \"acceptedAnswer\": {\n      \"@type\": \"Answer\",\n      \"text\": \"Yes, timely tax payments and accurate filing can help you avoid late fees and interest charges.\"\n    }\n  },{\n    \"@type\": \"Question\",\n    \"name\": \"Is tax planning applicable to salaried individuals under the new regime?\",\n    \"acceptedAnswer\": {\n      \"@type\": \"Answer\",\n      \"text\": \"Yes, salaried individuals can still plan by comparing the old and new tax regimes to decide which is better for them.\"\n    }\n  }]\n}\n<\/script>\n\n\n\n<p><strong>Further Read,<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/lxme.in\/what-are-hybrid-funds-and-why-is-it-perfect-for-women\/\" target=\"_blank\" rel=\"noreferrer noopener\">Why Hybrid Funds Are Smart Choice for Women Investors?<\/a>\u00a0<\/li>\n\n\n\n<li><a href=\"https:\/\/lxme.in\/what-are-contactless-credit-cards-and-how-does-it-work\/\" target=\"_blank\" rel=\"noreferrer noopener\">What are Contactless Credit Cards and How does it work?<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Many of us, feel that tax-related strategies are only for big businesses or the super-rich. But, as women managing households, careers, and financial independence, understanding tax planning in wealth management is a powerful tool for wealth creation. Let\u2019s break down the difference between tax planning and tax management in a way that\u2019s simple, practical, and <a href=\"https:\/\/lxme.in\/v1\/difference-between-tax-planning-and-tax-management\/\" class=\"more-link\">&#8230;<span class=\"screen-reader-text\">  Difference Between Tax Planning and Tax Management<\/span><\/a><\/p>\n","protected":false},"author":10,"featured_media":14483,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[650],"tags":[890,107],"class_list":["post-14482","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tax","tag-tax-management","tag-tax-planning"],"acf":[],"_links":{"self":[{"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/posts\/14482","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/comments?post=14482"}],"version-history":[{"count":4,"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/posts\/14482\/revisions"}],"predecessor-version":[{"id":18638,"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/posts\/14482\/revisions\/18638"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/media\/14483"}],"wp:attachment":[{"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/media?parent=14482"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/categories?post=14482"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lxme.in\/v1\/wp-json\/wp\/v2\/tags?post=14482"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}