The document discusses tax planning, tax avoidance, and tax evasion, emphasizing the legal and illegal methods of reducing tax liabilities. Tax planning involves arranging financial affairs within legal frameworks to benefit from exemptions and deductions without evading taxes, while tax avoidance uses legal loopholes, and tax evasion involves illegal activities. Effective tax planning is portrayed as beneficial for taxpayers, governments, and society by ensuring compliance while supporting economic development and social projects.

1. Tax planning

2. There is nothing which hurts
more than payment of taxes…..

3. Tax planning
• While dealing with financial terms many time you might
heard some unknown terms of which meaning you might
not know or you are not fully aware of it. You might have
heard term like Tax Evasion, Tax Planning and tax
Avoidance.
• Know the meaning of these with Thepolicykart.

4. 1. TAX PLANNING
2. TAX AVOIDANCE
3. TAX EVASION
Method of Tax planning
The avid goal of every taxpayers is to minimize his/her tax liability. Here are
three common practice to save taxes:-

5. • When any individual make false claims to reduces his total income or by not
providing any information regarding his total income then its called Tax Evasion.
• By doing so his tax liability is reduced which will result that he has to pay less tax.
• Tax Evasion is an illegal act and its also an immoral, anti-social and anti-national
act.
• To deal with such kind of activities, Direct Tax Laws has made strict provisions
which will results in heavy penalties or even tax evaders can be put behind the
bars.
Tax Evasion

6. • Tax avoidance means reducing your tax liability without breaking any law.
• In this an individual look for loopholes in the law and make most of those
loopholes to reduce the tax liability.
• In simple word you can say that Tax Avoidance is a legal means to reduce your
tax liability by taking advantage of lack of provision in the law and it will result in
less tax paid by you.
• By using Tax Avoidance you satisfy all provisions of law but in same time you
reduce your tax liability too.
• In tax avoidance no penalties or such things is imposed on you as you are not
breaking any law you just using loopholes in laws.
• However now legislature has added an provision in Direct Tax laws to check tax
avoidance.
Tax avoidance

7. • Tax planning is a way by which you arrange your financial affairs in such a way
that without breaking up any law you take full advantage of all Exemptions,
Deductions, Rebate and Reliefs allowed by law so that your tax liability will be
reduced.
• Actually Government provide deductions, exemptions, reliefs or rebate for the
benefits of economy and society.
• Like if you made donation to Social work related trust, then its good for Society.
Tax planning

8. ITS IS NOT AVOIDANCE TO PAYMENT OF TAX.
TAX PLANNING SHOULD NOT BE DONE WITH AN INTANT TO
DEFRAUD THE REVENUE.
ALL TRANSACTIONS WITH RESPECT TO TAX PLANNING SHUOLD
BE IN CORRECT FORM AND SUBSTANCE.
TAX PLANNING WORK WITHIN THE FRAMEWORK OF LOW AND
ITS NOT ILLEGAL.
Key points

9. •Tax planning is important for
Taxpayers
Government and
Society as well.
Importance of Tax planning

10. For Tax payer :
– Tax payer has to pay less tax by using tax planning because he is using all
available exemptions, deductions, reliefs, and rebates. All is done within the
boundaries of Law.
For Government :
– To use deduction or exemptions you have to invest money in some scheme which
results that you money is transferred back to government and then they can use
it to develop the country.
For Society :
– If government invest or start any new project or even tax payer invest his saved
money so he will generate employment, Government can invest in better projects
which develops society.

11. Thank you…