DMPQ: What is the difference between Tax evasion and Tax avoidance? What are the methods of Tax evasion?

 

Tax avoidance	Tax evasion
Legal way of saving taxes.	Illegal in a financial system
Recording of income	Not recording of income.
Help in saving, at the same time money can be channelized for economic growth	Help in saving, but since money is not accounted. Money cannot be channelized for economic growth.
Positive extrenalities	Negative
Tools: Health scheme, donation, insurance,	Tools : black money, under invoicing , smuggling, hawala

 

Different methods of Tax evasion are as follows:

1. Failure to pay the due: not paying taxes on time.
2. Smuggling
3. Filing false income tax and wealth tax returns
4. Maintaining wrong financial statements, showing forged profit and loss account.
5. Using fake documents to claim exemptions and deductions.
6. Sending money outside , creating swiss accounts
7. Wrong use of Tax treaties like DTAA, round tripping
8. Corruption

 

 

WBPCS  Notes brings Prelims and Mains programs for WBPCS  Prelims and WBPCS  Mains Exam preparation. Various Programs initiated by WBPCS  Notes are as follows:-

• WBPCS  Mains Tests and Notes Program
• WBPCS  Prelims Exam 2020- Test Series and Notes Program
• WBPCS  Prelims and Mains Tests Series and Notes Program
• WBPCS  Detailed Complete Prelims Notes

For any doubt, Just leave us a Chat or Fill us a querry––