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Welcome to the course direct tax laws and practice.


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Thank you for enrolling into the program.


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We will discuss various nitty gritties of


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direct tax laws and practice in this particular course.


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The basic objective as has been told


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is that to familiarize these participants with the various tax laws.


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And our main purpose is to make the


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students understand the nitty gritties of tax laws


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as well as to make them compliant


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to various tax laws and procedures.


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Sri Arun Jaitley the union finance minister,


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while presenting the union budget 2018-19


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lamented that India is a tax non compliant society


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that majority of the Indians who can afford to pay tax,


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but they do not pay income tax. A statistics was published in 2015-16 figures


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that only 3.7 crore individuals filed income tax.


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Out of these only 76 lakhs showed income above five lakhs.


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And out of this 76 lakhs the irony is that


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56 lakhs are salaried class. That means,


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people who can afford to pay income taxgiven a chance


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they are willing to remain outside the tax net.


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, there is a normal tendency to reduce the payment of tax liabilities.


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The tax liabilities can be reduced by various ways.


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I can discuss four ways in details. Number one is the tax evasion.


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Number two is the tax avoidance. Number three is tax planning.


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And fourthly, I will highlight various ways for tax management.


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Regarding the tax evasion. Tax evasion is the way to reduce tax liability.


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But one should remember this is illegal


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and whenever the person is caught, he will be punished under civil


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and criminal procedures. So this tax evasion is not


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at all desirable, and no one should adopt this particular means.


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Secondly is the tax avoidance. Tax avoidance is per se, not


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illegal, but not desirable. also. There are various ways


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where a person can legally avoid the payment of tax.


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But it doesn't help the country in their growth or in their development.


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as far as possible, the tax avoidance routes


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should not also be adopted by taxpayers.


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Third one, which is the tax planning, which is legal, and which is desirable


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also. It's a win win situation. The Income Tax Act


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make ample provisions for the taxpayer to reduce their tax liabilities.


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One of the common example is that 80 section 80C.


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Whereby a taxpayer can save money into particular desired avenues.


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And if the money is saved in those avenues,


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then the taxpayer can save a substantial amount of income tax.


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, the money where it is being saved.


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This money is also used by the government


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for various development purposes and capital formation purposes.


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, tax planning is a win win situation.


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Whereby the taxpayer saves a substantial amount of tax.


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As well as he contributes for the development and growth of the country.


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In the entire course, we'll be discussing various ways


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for tax planning, and we will give tips whereby


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a taxpayer can save their income tax by resorting to various avenues as


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specified in tax planning. Fourth one is Tax Management.


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Tax Management is actually compliance to tax laws.


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It relates to maintenance of accounts, audit


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that is the timely audit of accounts, the payment of tax, filing of returns, etc.


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In this particular course, will also highlight


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various aspects of tax management.


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Whereby a good citizen knows that how to comply with the tax laws and procedures


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and goes for the better tax management.


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Thus, we have learned the difference between tax evasion,


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tax avoidance and tax planning. ,


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that while tax evasion is undesirable


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and not at all expected from a good citizen.


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Tax evasion can be resorted to by overstating the expenditure


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understating the income, not disclosing the income earned by the assessee.


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, these are all risky ventures.


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A good citizen should not adopt these practices,


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because it will amount to excessive amount of penalties


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and the chance of prosecution.


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Second one is tax avoidance. Just to summarize,


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that it is the way by taking various loopholes in the act or various


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avenues in the act whereby a person avoids the payment of tax.


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Which is not illegal, whereas I repeat,


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this is not so much desirable also. The most desirable is the tax planning,


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like selecting an appropriate business plan,


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investing in desired projects, etc. Whereby the taxpayer


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helps the country to grow at the same time reduces his or her own tax liabilities.


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And there are various consultants who will give


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advice on the tax avoidance rules or tax planning rules.


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Tax planning and tax management is what all wants now a days,


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like at the one hand, no one wants to pay more tax.


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At the same time none wants to evade tax also,


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as the implications are very strict.


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That's why people should adopt for tax planning and tax management,


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as both are the best options to lower the tax burden


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without affecting the spirit of law. There is difference between


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tax planning and tax management while the objective of the tax planning


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is to minimize the tax liability.


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The objective of tax management


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is to comply with the provisions of


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income tax lawand its rules. Tax planning includes tax management,


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while tax management deals with filing of return on time,


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getting the accounts audited, deducting the tax at source,


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paying the tax on time, etc. Tax planning relates to future


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but tax management relates to past, present as well as future.


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Past, it includes assessment, proceedings, appeals, revisions, etc.


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While present it includes filing of return, payment of advance tax etc.


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For future to take corrective actions.


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Fourthly, tax planning helps in minimizing tax liability


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in short term as well as in the long term.


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Tax management helps in avoiding


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payment of interest, penalties, prosecution etc.


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We can say that tax planning is optional.


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Tax management is essential for every tax paying entity.


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In this week, we summarize that we have learned


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the various nitty gritties of income tax as well as


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the ways for minimizing the tax liability legally.


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To summarize, we can say that the ways of tax evasion


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should not be adopted. Tax avoidance, although not illegal.


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She's also not desirable, while


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a person should go for the techniques and tools for tax planning,


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as well as any taxpayer or any good citizen should go for tax management.


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Thank you very much.


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We'll meet you in the next week with a new chapter.