difference
This query is : Resolved
Guest
Guest
(Querist)
20 November 2008
What is the difference between Tax planning& Tax Evasion?
20 November 2008
Dear amit
Under tax planning we are reducing tax burden by way of investment as specified by the Tax authority.
Tax evasion is avoidance of tax even if the tax is actualy payable by the assesee.
Tax avoidance is legal
but tax evasion is illegal
Under tax planning we are reducing tax burden by way of investment as specified by the Tax authority.
Tax evasion is avoidance of tax even if the tax is actualy payable by the assesee.
Tax avoidance is legal
but tax evasion is illegal
20 November 2008
Visit https://www.colgupta.com/neededTaxPlanning.html where these terms are explained in detail.
Extracts of few important paras from above:
Tax Planning may be defined as an arrangement of one’s financial affairs in such a way that without violating in any way the legal provision of an Act, full advantage is taken of all exemptions, deductions, rebates and reliefs permitted under the act, so that the burden of the taxation on an assessee, as far as possible, is the least. Thus, tax planning is an act within the four corners of the Act and it is not a colourable device to avoid tax.
Tax avoidance, on the other hand, is an art of dodging tax without actually breaking the law. It is a method of reducing tax incidence by availing of certain loopholes in the law. It excludes fraud, concealment or other illegal measures. In other words, ‘tax avoidance’ is a device, which technically satisfies the requirement of the law, but in fact it is not in accordance with the legislative intent.
When a person reduces his total income by making false claim or by withholding the information regarding his real income, so that his tax liability is reduced, is known as tax evasion.
Extracts of few important paras from above:
Tax Planning may be defined as an arrangement of one’s financial affairs in such a way that without violating in any way the legal provision of an Act, full advantage is taken of all exemptions, deductions, rebates and reliefs permitted under the act, so that the burden of the taxation on an assessee, as far as possible, is the least. Thus, tax planning is an act within the four corners of the Act and it is not a colourable device to avoid tax.
Tax avoidance, on the other hand, is an art of dodging tax without actually breaking the law. It is a method of reducing tax incidence by availing of certain loopholes in the law. It excludes fraud, concealment or other illegal measures. In other words, ‘tax avoidance’ is a device, which technically satisfies the requirement of the law, but in fact it is not in accordance with the legislative intent.
When a person reduces his total income by making false claim or by withholding the information regarding his real income, so that his tax liability is reduced, is known as tax evasion.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Difference between Date of Payment and Date of Deduction?
- Tax Audit Applicability – Newly Formed Partnership Firm with Profit Below 6%/8%
- Unregistered suppliers utility
- TDS CREDIT MISMATCHING
- Buy back of shares u/s69
- EXPORT COMMERCIAL INVOICE HSN CODE
- Cash balance limit and property purchases limit
- Can we choose not to report losses in ITR3 if they cannot be carried forward?
- LIC maturity claim whether taxable
- Bank details not Visible on Traces Portal
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
- EXPORT PAYMENT
- NRI ITR2 account in 2025-26.
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
