The computation of taxable income and tax liability in India is governed by a separate Act called Income Tax Act, 1961. Hence all persons who want to compute their taxable income and plan savings in their income tax liability for each financial year, should be aware of this Act and the various rules and regulations made there under.As the law itself has given concessions from the gross taxable income of various assessesin the form of investments made in various avenues like paying insurance premium, investing in shares of companies or units mutual funds or buying national saving certificates or kisan VikasPatras etc., the tax payers can plan their investments in order to reduce their income tax liability.