Tax planning refers to the process of arranging one's financial affairs in a way that minimizes tax liabilities within the boundaries of the law. It involves analyzing a taxpayer's financial situation and making strategic decisions to optimize tax benefits and reduce tax burdens. The scope of tax planning encompasses various aspects, including:

1. Income tax planning: This involves assessing different sources of income, such as salary, investments, rental income, and capital gains, and identifying opportunities to reduce taxable income through deductions, exemptions, and credits.

2. Deduction and credit planning: Tax planning involves identifying and taking advantage of all available deductions and credits to minimize taxable income. This can include deductions for expenses like mortgage interest, medical expenses, education expenses, and charitable contributions, as well as tax credits for activities like adopting a child, implementing energy-efficient measures, or pursuing higher education.

3. Timing of income and expenses: Tax planning also involves strategically timing the recognition of income and expenses to minimize tax liabilities. This can include deferring income to a future year or accelerating expenses into the current year to reduce taxable income.

4. Business tax planning: For business owners, tax planning involves structuring their operations and transactions in a way that minimizes the tax burden. This can include selecting the appropriate legal structure for the business, utilizing tax-efficient accounting methods, and maximizing deductions for business expenses.

5. Estate and gift tax planning: Tax planning can also involve strategies to minimize estate and gift taxes. This includes utilizing exemptions, setting up trusts, making strategic gifts, and employing other estate planning techniques to transfer wealth to future generations while minimizing tax implications.

It is important to note that tax planning should always comply with tax laws and regulations. While taxpayers have the right to minimize their tax liabilities through legal means, engaging in illegal tax evasion practices is strictly prohibited.