Which one of the following is not an example of tax evasion?
Interpreting the tax law in ones own way to minimise tax liability.
Tax evasion is reducing tax by illegal means: concealing income, suppressing material facts, submitting false or misleading documents, not keeping proper accounts or inflating expenses. It attracts penalty and prosecution under the Income-tax Act, 1961.
Tax avoidance is reducing tax by arrangements that stay within the letter of the law, often by exploiting loopholes or reading the law in one's own favour. It is not illegal as such, although in McDowell & Co. (1985) the Supreme Court refused to allow colourable devices. Tax planning reduces tax within both the letter and the spirit of the law.
Submitting misleading documents is falsification, not keeping proper accounts of income earned hides the true income, and suppression of facts is concealment. All three are clear examples of evasion.
Interpreting the tax law in one's own way to minimise tax liability does not involve concealment or falsehood; the taxpayer discloses the facts and argues for a favourable reading. That is avoidance, so it is not an example of evasion.
Hence, Interpreting the tax law in ones own way to minimise tax liability.
Similar Questions
Under which of the following situations, the Appellate Tribunal can rectify the mistake in the order passed by it under Sec 254 (2) of Income Tax Act ?
(a) If subsequent decision of the Supreme Court/High Court is available on the subject after the Appellate Tribunal’s order
(b) If an assessee apply for rectification of the Tribunal’s order by raising fresh grounds before the Tribunal
(c) If the omission or mistake is on the part of Appellate Tribunal
(d) If the order is passed by the Appellate Tribunal under an erroneous impression of fact or law
Codes :
Mr. A earned a capital gain of ₹ 100 lakhs on 1-2-2014 from the sale of a long term capital asset (land) within the limits of Jaipur corporation. If he invests ₹ 60 lakhs, out of ₹ 100 lakhs, in Rural Electricity Corporation Bonds approved under Sec. 54 EC in 20-2-2014, what is the amount of exemption he can claim under Sec. 54 EC of Income Tax Act for the AY 2014-15 ?
Which of the following income is not chargeable under the head ‘income from business and profession’ ?
In which of the following cases, Assessing officer has the discretion to assess the income of the previous year in the previous year or in the subsequent assessment year ?
Which of the following are true in tax planning ?
(i) It is futuristic in its approach.
(ii) It has limited scope compared to tax management.
(iii) The benefits arising from it are limited particularly in the short run.
(iv) Its main objective is to reduce the tax liability.
Codes :
Minimum Alternate Tax (MAT) is imposed on
In which of the following long term assets, cost indexation benefit is allowed ?
Long term capital loss can be set off from which of the following ?
In which of the following cases, income of previous year is assessable in the previous year itself ?
Match the following items of List – I and List – II and select the correct answer from the codes given below :
List – I (Sections) List – II (Maximum Deduction) a. Section 80C of I.T. Act i. ₹ 10,000 b. Section 80D of I.T. Act ii. ₹ 40,000 c. Section 80 DDB of I.T. Act iii. ₹ 1,00,000 d. Section 80 TTA of I.T. Act iv. ₹ 15,000 Codes :
a b c d
Important Questions from Income-tax
Tax audit is compulsory in the case of a person carrying on profession and whose gross receipts exceeds which one of the following?
Which are the appropriate tax planning perspectives in case of shutdown or continued decision under the Income Tax Act, of 1961?
A. Business loss and unabsorbed depreciation can be carried forward and set off against profit and gain.
B. The loss-making company and profit-making company may merge to avail of the tax benefit
C. Tax benefit of deduction u/s 33 AB and 115 VT may be withdrawn and liable to tax for the year in which the business is discontinued.
D. The condition of section 80 IB / 80 IC of the Act, a deduction is allowed for such undertaking
E. If a person has more than one business, the loss-making business may not be discontinued.
Choose the most appropriate answer from the options given below:
Which of the following is NOT a change of the new Income Tax bill introduced in the Parliament during February 2025?
What is the basic difference in the aggregates at market price and factor cost?
The ratio of income and expenditure is 9:5. Income increases by 40% and expenditure decreases by 10%. If the initial income is ₹45,000 then the final saving (in ₹) is:
