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Welcome to the course direct tax laws and practice.
Thank you for enrolling into the program.
We will discuss various nitty gritties of
direct tax laws and practice in this particular course.
The basic objective as has been told
is that to familiarize these participants with the various tax laws.
And our main purpose is to make the
students understand the nitty gritties of tax laws
as well as to make them compliant
to various tax laws and procedures.
Sri Arun Jaitley the union finance minister,
while presenting the union budget 2018-19
lamented that India is a tax non compliant society
that majority of the Indians who can afford to pay tax,
but they do not pay income tax. A statistics was published in 2015-16 figures
that only 3.7 crore individuals filed income tax.
Out of these only 76 lakhs showed income above five lakhs.
And out of this 76 lakhs the irony is that
56 lakhs are salaried class. That means,
people who can afford to pay income taxgiven a chance
they are willing to remain outside the tax net.
, there is a normal tendency to reduce the payment of tax liabilities.
The tax liabilities can be reduced by various ways.
I can discuss four ways in details. Number one is the tax evasion.
Number two is the tax avoidance. Number three is tax planning.
And fourthly, I will highlight various ways for tax management.
Regarding the tax evasion. Tax evasion is the way to reduce tax liability.
But one should remember this is illegal
and whenever the person is caught, he will be punished under civil
and criminal procedures. So this tax evasion is not
at all desirable, and no one should adopt this particular means.
Secondly is the tax avoidance. Tax avoidance is per se, not
illegal, but not desirable. also. There are various ways
where a person can legally avoid the payment of tax.
But it doesn't help the country in their growth or in their development.
as far as possible, the tax avoidance routes
should not also be adopted by taxpayers.
Third one, which is the tax planning, which is legal, and which is desirable
also. It's a win win situation. The Income Tax Act
make ample provisions for the taxpayer to reduce their tax liabilities.
One of the common example is that 80 section 80C.
Whereby a taxpayer can save money into particular desired avenues.
And if the money is saved in those avenues,
then the taxpayer can save a substantial amount of income tax.
, the money where it is being saved.
This money is also used by the government
for various development purposes and capital formation purposes.
, tax planning is a win win situation.
Whereby the taxpayer saves a substantial amount of tax.
As well as he contributes for the development and growth of the country.
In the entire course, we'll be discussing various ways
for tax planning, and we will give tips whereby
a taxpayer can save their income tax by resorting to various avenues as
specified in tax planning. Fourth one is Tax Management.
Tax Management is actually compliance to tax laws.
It relates to maintenance of accounts, audit
that is the timely audit of accounts, the payment of tax, filing of returns, etc.
In this particular course, will also highlight
various aspects of tax management.
Whereby a good citizen knows that how to comply with the tax laws and procedures
and goes for the better tax management.
Thus, we have learned the difference between tax evasion,
tax avoidance and tax planning. ,
that while tax evasion is undesirable
and not at all expected from a good citizen.
Tax evasion can be resorted to by overstating the expenditure
understating the income, not disclosing the income earned by the assessee.
, these are all risky ventures.
A good citizen should not adopt these practices,
because it will amount to excessive amount of penalties
and the chance of prosecution.
Second one is tax avoidance. Just to summarize,
that it is the way by taking various loopholes in the act or various
avenues in the act whereby a person avoids the payment of tax.
Which is not illegal, whereas I repeat,
this is not so much desirable also. The most desirable is the tax planning,
like selecting an appropriate business plan,
investing in desired projects, etc. Whereby the taxpayer
helps the country to grow at the same time reduces his or her own tax liabilities.
And there are various consultants who will give
advice on the tax avoidance rules or tax planning rules.
Tax planning and tax management is what all wants now a days,
like at the one hand, no one wants to pay more tax.
At the same time none wants to evade tax also,
as the implications are very strict.
That's why people should adopt for tax planning and tax management,
as both are the best options to lower the tax burden
without affecting the spirit of law. There is difference between
tax planning and tax management while the objective of the tax planning
is to minimize the tax liability.
The objective of tax management
is to comply with the provisions of
income tax lawand its rules. Tax planning includes tax management,
while tax management deals with filing of return on time,
getting the accounts audited, deducting the tax at source,
paying the tax on time, etc. Tax planning relates to future
but tax management relates to past, present as well as future.
Past, it includes assessment, proceedings, appeals, revisions, etc.
While present it includes filing of return, payment of advance tax etc.
For future to take corrective actions.
Fourthly, tax planning helps in minimizing tax liability
in short term as well as in the long term.
Tax management helps in avoiding
payment of interest, penalties, prosecution etc.
We can say that tax planning is optional.
Tax management is essential for every tax paying entity.
In this week, we summarize that we have learned
the various nitty gritties of income tax as well as
the ways for minimizing the tax liability legally.
To summarize, we can say that the ways of tax evasion
should not be adopted. Tax avoidance, although not illegal.
She's also not desirable, while
a person should go for the techniques and tools for tax planning,
as well as any taxpayer or any good citizen should go for tax management.
Thank you very much.
We'll meet you in the next week with a new chapter.