Which of the following two statements are not characteristics of Tax Planning? (i) Arrangement of one’s…
Omitting taxable income and claiming investment deductions without making the required investments are tax evasion, not tax planning. Tax planning uses lawful deductions and…
Choose your answer
Which of the following two statements are not characteristics of Tax Planning?
(i) Arrangement of one’s financial affairs by taking legitimate benefit of all deductions
(ii) Omission of incomes earned from other sources during the tax year
(iii) Claiming deductions for eligible investments and National Pension System contributions without investing in the schemes
(iv) Having no intention to deceive the legal spirit behind tax laws
Answer and explanation
Correct answer C
Omitting taxable income and claiming investment deductions without making the required investments are tax evasion, not tax planning. Tax planning uses lawful deductions and respects the purpose of the law.
Practice for these exams
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West Bengal SET (WB SET)