There are many things to know about the topic of tax like tax evasion, tax avoidance, and tax planning. Let us first discuss tax evasion and its positives and negatives.
It is the process when a person is trying to reduce his income by giving some false information about the income. This is usually done to decrease the amount of tax he has to pay. IT is an illegal activity and also an act which is done against the nation. Some law has been set for those people who are doing so and they will get severe punishments like keeping them in prison. A person can easily get to know all about the tax using a software called the Crypto VIP Club software.
How a person can reduce the tax amount:
A person can easily reduce the tax amount he has to pay by doing some criminal activities. We can list those activities below.
- They will never show the gain in the capital amount.
- They will claim the bad debts and the losses which were never occurred.
- The sales made by them will not be provided.
- They will show the excessive salary paid.
- They will never show the income occurred from the benami
- They will usually try to make their own expenses as business expenses.
Penalties for tax evasion:
The persons who regularly do tax evasion will get some penalties from the tax department since it is an illegal act.
- The persons will be collected with some 100% to 300% of tax amount when they fail to disclose the income.
- Some amount will be collected but that amount should not exceed the actual due tax amount.
- When the income tax is filed on the due date, those persons will be punished with Rs.200 per day as a penalty amount till he files the tax statements.
- When they try to conceal some fringe benefits which are taxable, they will be supposed to pay 100% to 300% of the due amount.
- When a person fails to maintain the account statements properly, he has to pay Rs.25000 as penalty pay.
Tax avoidance is trying to reduce the tax liability amount by making some loophole points. This is different from tax evasion. It is a legal activity to pay the tax amount and reducing the tax liability. There will no penalties or punishments as we are not breaking any tax law in tax avoidance. We just try to make provisions for reducing the tax liability amount.
Thus conclude that tax should be paid in a correct way and in the correct period of time for our benefits.