Consider the following statements: I. Tax Evasion is illegal. II. Tax avoidance is in no way a crime.

Both I and II are true. Tax evasion involves unlawful suppression of income or falsification of accounts and is a punishable offence under section 478 of the Income-tax Act, 2025. Tax avoidance arranges affairs within the letter of the law to reduce tax liability; even where anti-avoidance provisions disallow a tax benefit in assessment, tax avoidance is not a crime.