What is tax avoidance vs tax evasion?

Legally reducing one’s taxable income is known as tax avoidance. Hiding, concealing or manipulating the information about one’s income with the tax authorities is known as tax evasion. Tax evasion is completely illegal in the eyes of the law. You can read about the Black Money, Tax-Evasion & Tax-Avoidance in the given link.

Tax evasion will invite penalties, fines and even imprisonment from a minimum time of 3 months to a maximum of 7 years, depending on the magnitude of tax evasion.

Further readings:

  1. Black Money: Definition, Sources & Measures to Curb Black Money. [UPSC Economy]
  2. Double Taxation Avoidance Agreements (DTAA) – Countries Involved, Income Tax Provisions

Related Links

Taxation System in India – Types, GST, VAT, Objectives, Limitation, Laffer Curve

General Anti-Avoidance Rule (GAAR) – Anti Tax Avoidance Law in India

Previous Years Economics Mains Questions for UPSC General Studies Paper – 3

Economics Notes For UPSC Examination

Global Corporate Tax and India: RSTV- Big Picture

Topic-Wise GS 3 Questions for UPSC Mains

UPSC Mains General Studies Paper-III Strategy, Syllabus & Structure

CBDT – Central Board of Direct Taxes: Functions and Structure

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