In India 90% people buy the Financial product in the name of tax planning. When asked about the product, most of them even don’t know what the crux of this product. In-fact tax planning is altogether different prospect. It is the analysis of one’s financial situation from a tax efficiency point of view so as to plan one’s finances in the most optimized manner. Tax planning is a legal way of reducing income tax liabilities, however, caution has to be maintained to ensure that the taxpayer isn’t knowingly indulging in tax evasion or tax avoidance.