what is tax planning and tax evasion

However amongst tax planning tax avoidance and tax evasion tax planning is arguably the best way to reduce your tax liability since it helps save taxes in a logical as well as. Whereas tax planning assists corporations to achieve tax efficiency.

Tax Planning Tax Evasion Tax Avoidance

Tax avoidance is the use of loopholes in the taxation laws and conducting transactions so as to avoid tax liability or at least reduce the liability as far as possible.

. In Tax Planning a taxpayer is doing what the govt wants him to do whereas in tax avoidance a taxpayer is doing something which the govt didnt expect the taxpayer to do. As considered as fraud tax evasion is an illegal method to reduce tax. Tax evasion is performed by the.

To reduce tax liability by applying script and moral of law. To reduce the tax liability to the minimum by applying the script. Difference between Tax Planning and Tax Evasion.

Tax planning is using legal. There is a thin line of difference between the two but the consequences are far away from thin. But tax evasion which is termed tax fraud is an unlawful.

Statutory provisions are followed under tax planning while statutory provisions are violated under tax evasion. The penalties for tax evasion depend on the severity. Usually tax evasion involves hiding or misrepresenting income.

The consequences of tax evasion. 2OBJECT- Tax planning. Tax evasion is a federal crime that can result in substantial fines and even imprisonment.

Tax avoidance and tax planning are both legal terms. Very Simple analysis of different terms under Income Tax Act 1961 Tax Planning Tax Evasion Tax Avoidance Tax Management is as under-. Three methods of saving taxes have been developed in most countries of the world in the past few decades.

Tax evasion tax avoidance. Answer 1 of 11. Tax avoidance is performed by availing loopholes in the law but complying with law provisions.

Tax evasion on the other hand is using illegal means to avoid paying taxes. Tax Evasion is an unlawful way of. 3 Tax planning t ax evasion and tax avoidance.

Income- Rs 100- Case 1. Iii Tax Avoidance is done through not malafied intention but complying the provision of law. The Govt is trying.

Tax evasion is undertaken by employing unfair means. In other words tax planning is an art in which ones financial affairs are logically planned in such a way that the assessee benefits from all of the taxation laws eligible. Lets understand it by example.

In contrast Tax Planning takes maximum advantages of the exemptions deductions rebates reliefs and other tax concessions allowed by taxation statutes leading to. Tax evasion is a process to reduce tax liability by following illegal ways like inflating expenses or understating the income.

Tax Evasion Meaning Types Examples Penalties