Income tax returns (ITR) filing: What is tax avoidance
In an effort to save tax, do not take the wrong road that meanders into illegalities. The effort may tempt you to follow certain steps that may come under unlawful way of savings taxes, but do not go that way. Taking advantage of loopholes in our income tax laws to reduce tax outgo is not right. This is not legal. Instead, you should make plan to save your taxes in a way that will ensure you sleep soundly at night. However, to make sure you don't go wrong, know what is tax avoidance:
1. As compared to the tax planning, tax avoidance is an activity taken up by a taxpayer by using the gaps i.e. loopholes embodied in our income tax laws which helps them reduce tax outgo. Photo: PTI
2.Even though this kind of exercise may/may not fall within the legal framework but it essentially kills the main intent behind any rules and regulations. These activities are against the spirit of any law. Pheto: PTI
3. So, tax planning is something to take maximum benefit from even as you should shun tax avoidance. Photo: Reuters
4.Though government keeps filling these gaps from time to time and it is strongly suggested you stay away from activities leading to tax avoidance. Photo: Reuters