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Tax Planning
Tax planning is an arrangement of ones affairs in such a way that the burden of taxation on assessee is reduced to the minimum without violating in any way the legal provisions. It carried out the full enjoyment of Tax Exemptions, Tax Deductions & Tax Rebates. It is within the four corners of Law and regarded as fully legitimate.
TAX AVOIDANCE
An art of dodging out i.e. actually breaking law. Method of reducing tax incidence by finding out loopholes of law. A device which technically satisfies requirement of law but not in legal accordance. It includes attempt to prevent or reduce tax liability. Examples: Agricultural Income, Section 80G- Donations are tax exempted
TAX EVASION
To reduce tax liability when accounts are interpreted then it is Tax Evasion. It is not only illegal but also immoral and antinational. Under tax laws, tax evaders are penalized by heavy duty. Examples: Falsification of Accounts, Inflation of expenses, Non-disclose of capital gain or other incomes.
Tax Planning
An exercise aimed at reducing tax liability by availing maximum benefits of various exemptions, deductions & rebates
Tax Avoidance
An exercise aimed at reducing tax liability by exploiting some loopholes of the law
Tax Evasion
An exercise of reducing tax liability either by showing lesser income than actual or by hiding the source of any income
TAX MANAGEMENT
Regular feature of business enterprises and a form of tax planning. Tax Management refers to compliance of Tax laws It includes maintenance of records in prescribed format It includes getting audited the records, filing returns, TDS and pay taxes
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