In this Article on Tax Planning we shall discuss the various aspects connected with tax planning through the concept of "Sub-Partnership". It is legally possible to have a sub-partnership firm between a partner of one partnership firm with some outsider who is not a partner in the main firm. The purpose of this sub-partnership is to subdivide or share the profits received by the first partner from his partnership firm between himself and his outside partner namely the stranger to the main partnership firm. This type of arrangement is known as "Sub-Partnership". In the Income-tax Act the "Sub-Partnership'' is recognised as a separate tax entity. If this type of sub-partnership makes an application for Registration, it will be so granted in the above context. We now will discuss the pros and cons of this sub-partnership as also the tax planning advantages which make the formation of "Sub-Partnership" a very important mode of legal tax saving ....