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Any planning of tax which aims at reducing tax liability in a legally recognised permissible way can be termed as an instance of:

Any planning of tax which aims at reducing tax liability in a legally recognised permissible way can be termed as an instance of: Correct Answer Tax avoidance

The correct answer is Tax avoidance

Key Points Tax Avoidance: 

  • Tax avoidance is the practise of reducing one's tax liability using legal means.
  • In other terms, it is the act of utilising the tax laws in a single area for one's own advantages in order to lower one's tax liability.
  • Tax avoidance is a legal strategy, but it is not recommended because it can be utilised to one's own benefit to lower the amount of tax that is owed.
  • Tax avoidance is the practise of finding innovative ways to evade paying taxes that fall within the legal parameters by unfairly exploiting the flaws in the tax laws.
  • By modifying the accounts so that there will be no tax law violations, tax avoidance can be accomplished.
  • Tax avoidance is lawful but in some cases it could come in the category of crime.

Additional InformationTax planning: Tax planning is the practise of efficiently examining one's financial condition. One can lower their tax liability by using tax planning. It entails legally structuring one's income to take advantage of several exemptions and deductions.

Tax evasion: Tax evasion is the criminal practise of intentionally understating taxable income or exaggerating expenses in order to reduce tax obligations. It is an illegal effort to lessen one's tax liability.

Tax Management: The administration of money for the purpose of paying taxes is referred to as tax management. Tax management deals with timely filing of Returns, having the accounts audited, withholding tax at source, and other related issues. Tax management aids in preventing the payment of interest, penalties, and legal fees.

Related Questions

Which of the following components are true about tax planning?
1. Tax planning is the process of analyzing a financial plan or a situation from a tax perspective.
2. The objective of tax planning is to make sure there is tax efficiency. With the help of tax planning, one can ensure that all elements of a financial plan can function together with maximum tax-efficiency.
3. Reducing tax liability and increasing the ability to make contributions towards retirement plans are critical for success.
4. Tax planning comprises various considerations such as size, the timing of income, timing of purchases, and planning are concerned with other kinds of expenditures.
5. The chosen investments and the various retirement plans should go hand-in-hand with the tax filing status as well as the deductions in order to create the best possible outcome.
Statement I): If the tax liability has been reduced within the legal framework, it is tax planning. Statement II): If tax liability has been reduced to get the benefit of deduction available under the income tax, it is called tax evasion. In the context of the above two statements, which one of the following codes is correct?
Statement (I): If the tax liability has been reduced within the legal framework, it is tax planning.
Statement (II): If tax liability has been reduced to get benefit of deduction available under the income tax, it is called tax evasion.
In the context of the above two statements, which one of the following is correct?
Propositions as regards the liability of the surety under the surety bond are:
1. The liability of the surety is mutually exclusive of the liability of the accused under his personal bond.
2. The liability of the surety is contingent on the liability of the accused under his personal bond the liability of the surety.
3. is limited to the amount of the surety bond.
Now which of the following is correct
Consider the following statements: a. Indian planning is indicative of economic planning. b. Indian planning is physical planning. c. Indian planning is social planning. Which of the statements given above are correct?
In the following question, the 1st and the last part of the sentence/ passage are numbered 1 and 6. The rest of the sentence/passage is split into four parts and named P, Q, R and S. These four parts are not given in their proper order. Read the sentence/passage and find out which of the four combinations is correct. 1. The Goods and Services Tax (GST) is imposed on the supply of products and/or services within the country. P. This can be achieved by charging uniform tax rates and eliminating economic barriers. Q. The objective of GST is to drive India towards becoming an integrated economy. R. These include Service Tax, Purchase Tax, Central Excise Duty, Value Added Tax, Entry Tax, Luxury Tax, Local Body Taxes, etc. S. It subsumes multiple indirect taxes that are imposed by the State Governments or the Central Government 6. Thus, it will make the country a common national market
Tax planning is honest and right approach to attain the maximum benefit of taxation laws within its framework only. Objectives of tax planning are:
1. Productive investment
2. Un-healthy growth of economy
3. Minimisation of litigation
4. Increase in tax liability.
In the following question, sentences of a paragraph have been jumbled and labeled as A, B, C, and D. You are required to rearrange the jumbled sentences in the right order to form a meaningful and coherent paragraph and mark your response accordingly by selecting the correct option. A. The sellers usually add the tax expense into their costs, and the price the customers pay is inclusive of GST. B. The concept of GST is that it is an “Indirect Tax”, ie, this tax is not directly paid by customers to the government, but is rather levied on the manufacturer or seller goods and the providers of services. C. GST, or Goods and Services Tax, is a tax that customers have to bear when they buy any goods or services, such as food, clothes, electronics, items of daily needs, transportation, travel, etc. D. Thus, in most cases, you end up paying a tax even if you are not an income taxpayer.
What is true for Planning in India? 1. In August 1937, the Congress Working Committee at its meeting in Wardha adopted a resolution of national reconstruction and social planning. 2. Subhash Chandra Bose, in his presidential speech at Haripura declared that the national state on the advice of the planning commission would adopt a comprehensive scheme. 3. Modi Government renamed ‘Planning Commission’ as 'Niti Aayog’ 4. Subhash Chandra Bose announced the formation of a National Planning Committee with Jawaharlal Nehru as Chairman in 1938.
The following sentences form a paragraph. They are numbered a P, Q, R and S. These four parts are not given in their proper order. Read the sentences and choose the alternative that arranges them in a correct order. P. Also, the customers will have funds to spend because of lower tax rates.  Q. The Goods and Services Tax (GST) is an indirect tax which entails that the tax is approved till the last stage where it is the purchaser of the goods and services who bears the tax. R. It will substitute most other indirect taxes and synchronize the differential tax rates on mass-produced goods and services. S. The government of India claims that GST will enhance Indian GDP by 2%.