Tax avoidance

5. Features of Tax avoidance
1. Nature: Tax avoidance is legal whereas Tax evasion is
illegal
2. Attributes: Tax planning is moral. Tax avoidance is
immoral.
3. Motive: tax avoidance is dodging of tax.
4. Consequences: Tax avoidance leads to the deferment
of tax liability.
5. Objective: The objective of Tax avoidance is to reduce
tax liability by applying the script of law.
6. Permissible: Tax avoidance is permissible whereas Tax
evasion is not permissible.
Tax planning and Tax avoidance are the legal ways to
reduce tax liabilities but Tax avoidance is not advisable as
it manipulates the law for one’s own benefit.

6. The tax code supports tax avoidance
Though the words "tax avoidance" might sport somewhat of a
negative connotation, in reality, the tax code is designed to help
workers pay as little tax as possible. In fact, there are a number of
sanctioned methods for avoiding taxes, the most common of
which include:
•Using pre-tax dollars to fund an IRA or 401(k).
•Taking deductions for things such as mortgage interest, property
taxes, medical expenses, and charitable contributions.
•Claiming tax credits offered by the IRS.
•Deducting business expenses to reduce your taxable income.
•Holding investments longer to benefit from a lower capital gains
tax rate.
In fact, part of the reason the tax code is so complicated is that it's
loaded with tax avoidance provisions. And the more tax avoidance
measures you take, the more money you stand to save.

7. Is tax avoidance illegal?
Tax avoidance is perfectly legal provided you
follow the rules. For example, you're allowed to deduct
charitable contributions on your taxes, so if you give
$500 to charity over the course of a given tax year, you
have every right to deduct that amount on your return.
But if you lie and claim you donated $1,500, that's not
only dishonest, but also illegal.