The primary objectives of tax planning are as follows:

• Reduction of tax liability: A taxpayer can retain the maximum part of his/her earnings by claiming the deductions under sections 80C to 80U and availing exemptions and other credits admissible under the Act.
• Minimisation of litigation: With the taxpayer trying to pay the least tax and tax administrator attempting to extract the maximum, the two are always at war. Effective tax planning under the provisions of law saves the taxpayer from the hardships caused by undesired litigation.
• Productive investments: Under the taxation laws, a taxpayer can avail various avenues for productive investments of the earnings that grant a substantial or even total relief from taxation.
• Economic stability: Smooth tax flow from taxpayer to tax administrator results in economic stability by means of productive investments made by the taxpayer and harnessing resources for national projects.
• Growth of economy: Saving taxes through legally sanctioned devices fosters the growth of both citizens and the nation as a whole.

Equity Linked Saving Scheme (ELSS), Public Provident Fund (PPF), education loan, health insurance, life insurance, pension plans and capital gains bonds are some of the common tax saving investment avenues for a taxpayer.