TAX PLANNING, TAX EVASION AND TAX AVOIDANCE
TAX
PLANNING, TAX EVASION AND TAX AVOIDANCE
Tax planning is a way to reduce
tax liability by taking full advantages provided
by the Act through various
exemptions, deductions, rebates
& relief. In other words,
it is a way to reduce tax liability by applying script
& moral of law. It is the scientific planning so as to attract
minimum tax liability or postponement of tax liability for the subsequent period by availing
various incentives, concessions, allowance, rebates and relief provided in the Act.
Tax evasion is the illegal
way to reduce tax liability by deliberately suppressing income or sale
or by increasing expenses,
etc., which results in reduction of total income
of the assessee. Tax evasion
is illegal, both in script & moral.
It is the cancer of modern society
and work as a clog in the development of the nation.
Tax avoidance is an exercise by which the assessee legally
takes advantages of loopholes in the Act. Tax avoidance is a practice of bending the law without
breaking it. It is a way to reduce tax liability by applying script
of law only.
Most of the amendments are aimed
to curb such loopholes.
|
Income Slab |
Income Tax |
|
Upto ₹ 2,50,000 |
NIL |
|
₹ 2,50,000 – ₹ 5,00,000 |
5% |
|
₹ 5,00,000 – ₹ 10,00,000 |
20% |
|
Above ₹ 10,00,000 |
30% |
|
Surcharge ( subject to Marginal
Relief ) |
10% (If taxable income > ₹ 50 lacs) |
|
15% (If taxable income > ₹ 1 Crore) |
|
|
25% (If taxable income > ₹ 2 Crore) |
|
37% (If taxable income > ₹ 5 Crore) |
|
|
Health & Education Cess |
4% of (Income Tax + Surcharge). |
Individual
resident (Aged below 60 years) or Any NRI or HUF or AOP or BOI or AJP
|
Income Slab |
Income Tax |
|
Upto ₹ 3,00,000 |
NIL |
|
₹ 3,00,000 – ₹ 5,00,000 |
5% |
|
₹ 5,00,000 – ₹ 10,00,000 |
20% |
|
Above ₹ 10,00,000 |
30% |
|
Surcharge ( subject to
Marginal Relief ) |
10% (If taxable income
> ₹ 50 lacs) |
|
15% (If taxable income
> ₹ 1 Crore) |
|
|
25% (If taxable income
> ₹ 2 Crore) |
|
|
37% (If taxable income > ₹ 5 Crore) |
|
|
Health & Education Cess |
4% of (Income Tax + Surcharge). |
|
Income Slab |
Income Tax |
|
|
Upto ₹ 5,00,000 |
NIL |
|
|
₹ 5,00,000 – ₹ 10,00,000 |
20% |
|
|
Above ₹ 10,00,000 |
30% |
|
|
Surcharge ( subject to
Marginal Relief ) |
10% (If taxable income
> ₹ 50 lacs) |
|
|
15% (If taxable income
> ₹ 1 Crore) |
||
|
25% (If taxable income
> ₹ 2 Crore) |
||
|
37% (If taxable income
> ₹ 5 Crore) |
||
|
|
||
|
Health & Education Cess |
4% of (Income Tax + Surcharge). |
· Rebate under
Section 87A
Rs 12,500 or 100% of income tax (whichever is
lower) for individuals with income below
Rs 5 Lakhs
Co-operative Society
|
Income Slab |
Income Tax |
|
Upto ₹ 10,000 |
10% |
|
₹ 10,000 – ₹ 20,000 |
20% |
|
Above ₹ 20,000 |
30% |
|
Surcharge ( subject to
Marginal Relief ) |
12% (If taxable income
> ₹ 1 Crore) |
|
Health & Education Cess |
4% of (Income Tax + Surcharge). |
Firm
|
Particular |
Income Tax |
|
Income Tax |
30% |
|
Surcharge ( subject to
Marginal Relief ) |
12% (If taxable income
> ₹ 1 Crore) |
|
Health & Education Cess |
4% of (Income Tax + Surcharge). |
|
Particular |
Income Tax |
|
Income Tax |
30% |
|
Surcharge ( subject to
Marginal Relief ) |
12% (If taxable income
> ₹ 1 Crore) |
|
Health & Education Cess |
4% of (Income Tax + Surcharge). |
Claiming
Exemptions and Turnover in 2017-18 upto ₹ 400 crores
|
Particular |
Income Tax |
|
|
Income Tax |
25% |
|
|
Surcharge ( subject to
Marginal Relief ) |
7% (If taxable income >
₹ 1 Crore) |
|
|
12% (If taxable income
> ₹ 10 Crore) |
||
|
|
||
|
Health & Education Cess |
4% of (Income Tax + Surcharge). |
Claiming Exemptions and Turnover in 2017-18 exceeding ₹ 400 crores
|
Particular |
Income Tax |
|
|
Income Tax |
30% |
|
|
Surcharge ( subject to
Marginal Relief ) |
7% (If taxable income >
₹ 1 Crore) |
|
|
12% (If taxable income
> ₹ 10 Crore) |
||
|
|
||
|
Health & Education Cess |
4% of (Income Tax + Surcharge). |
NOT Claiming Exemptions U/s 155BAA
|
Particular |
Income Tax |
|
Income Tax |
22% |
|
Surcharge |
10% (If taxable income
> ₹ 1 Crore) |
|
Health & Education Cess |
4% of (Income Tax + Surcharge). |
NEW Company U/s 155BAB
Domestic Manufacturing
Company (4) –
|
Particular |
Income Tax |
|
Income Tax |
15% |
|
Surcharge |
10% (If taxable income
> ₹ 1 Crore) |
|
Health & Education Cess |
4% of (Income Tax + Surcharge). |
|
Particular |
Income Tax |
|
Royalty received from Government or an Indian concern in
pursuance of an agreement made with the Indian concern after March 31, 1961,
but before April 1, 1976, or fees for rendering technical services in
pursuance of an agreement made after February 29, 1964 but before April 1,
1976 and where such agreement has, in either case, been approved by the
Central Government |
50% |
|
Any other income |
40% |
|
Surcharge |
2% (If taxable income >
₹ 1 Crore) |
|
5% (If taxable income > ₹ 10 Crore) |
|
|
Health & Education Cess |
4% of (Income Tax + Surcharge). |
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