2. MEANING :- LOOP HOLES
Ambiguity in a system
Which can be used to avoid
procedure of system
3. DEFINITION
Exploitation of a tax law
which can reduce or eliminate tax
Legal, taxation strategies that are
exploited for personal gain.
4. HOW IT WORKS
Local
development law
that requires
An unoccupied
building to pay
real estate taxes
so long as it
receives a
certificate of
completion
Builder :- choose
not to "complete"
the building.
5. SOME WAYS TO AVOID TAX
Contributing to charity
Deferred Income
Do a Bond Swap
Tax break
6. WHY IT MATTERS????
Exploiting loopholes
may lead to
intensive scrutiny
and audits
Reducing our
facilities
7. DIRECT TAX CODE
Direct Tax Code is a
combination of
major tax relief and
removal of most tax-
exempted benefits
a document
containing changes
in Exemptions, Tax
slab
8. CONTD…..
New tax slab
INCOME SCOPE TAX PERCENTAGE
LESS THAN 1.6 LACS 0%
1.6 – 10 LACS 10%
10 – 25 LACS 20%
25+ Lacs 30%
9. FEATURES
Only half of Short-term capital Surcharge and education
gains will be taxed cess are abolished.
Tax on dividends 5 % Exemption on Education
loan
On LTA (Leave travel allowance)
is abolished
10. ADVANTAGES
Whole process much Generate more tax
simpler revenue
reduces the corporate tax a new face to the
to 25% from the current Indian economy
34%
Editor's Notes
loophole is an ambiguity in a system, such as a law or security, which can be used to circumvent or otherwise avoid the intent, implied or explicitly stated, of the system. Loopholes are searched for and used strategically in a variety of circumstances, including taxes, elections, politics, the criminal justice system, or in breaches of security.
let's say John and his wife had a baby in 2011. When John files his tax return for the year 2011, he will qualify for a $1,000 child tax credit, which lowers his tax bill by $1,000. In other words, John and his wife get a tax break for having a baby tax break for small businesses who invest in "heavy vehicles". The tax break applies if the vehicle is used at least 50% of the time for the business. Business owners may exploit this loophole by upgrading their own vehicles to SUVs, which are considered "heavy" under the tax law, and thereby gain a personal financial advantage.
