Corporate Tax Planning

Dr Amit Kumar Sinha aksinha1@amity.edu dramitksinha@gmail.com

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not voluntary contributions. ……… nobody owes any public duty to pay more than the law demands: taxes are enforced extractions. there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible.Tax Planning It’s legitimate “…. ” 2 T .

exemptions.Tax Planning Corporate Tax Planning “Tax Planning can be defined as an arrangement or management of one’s financial affairs by applying complete legal provisions and benefits of all deductions. allowances and rebates in such a way to reduce the tax liability to minimum” 3 T .

Features Of Tax Planning Corporate Tax Planning • It comprises provisions within the provisions given in the Income Tax Act. • Transactions shouldn’t take form of colourable devices • There is no intentions to deceit the legal spirit behind the provisions in law. • All Legal obligations and the transactions are met. 4 T .

can be termed as an instance of tax avoidance.” 5 T .Tax Avoidance Corporate Tax Planning “Any Planning of tax which aims at reducing or negating tax liability in legally recognized permissible ways.

• Avoidance of tax is a legal practice within the rules and provisions • There is no evidence of mala fide motive involved in tax avoidance 6 T .Features of Tax Avoidance Corporate Tax Planning • Legal arrangement of affairs of affairs in such a way so as to minimize tax liability.

Tax Evasion “ All methods by which tax liability is illegally avoided are termed as tax evasion.” 7 T .

Features of tax evasion – Intent to defraud – Illegal or unlawful – “Unrelated to a professional practice” – its tax omission 8 T .

Tax Avoidance Vs. Unlawful even an assessee guilty of tax evasion may be punished Its Hedging of tax liability with the Its tax omission framework of law Its intentionally performed before tax liability arises 9 Its intentional attempt to avoid payment of tax after tax liability arises T . Tax Evasion Tax avoidance Any Planning of tax which aims at reducing or negating tax liability in legally recognized permissible ways. can be termed of tax avoidance Use of loopholes to mitigate tax liability Its legally sanctioned Tax Evasion All methods by which tax liability is illegally avoided are termed as tax evasion Use of unfair means or methods to avoid tax liability.

Its futuristic approach Tax planning is very wide its cover tax management also Benefits from tax planning are substantial particularly in long run 10 T . penal interest. prosecution etc can be avoided. Tax Management Tax Planning The Objective of tax planning is to reduce the tax liability to minimum Tax Management Objective of the tax management is to comply with the provisions of law Its concerned with past .Tax Planning Vs. present and future also Tax management has very limited scope its deals with specific activities As a result of effective tax management . penalty.

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