Explain with supporting reasons whether the following instances pertain of which of the tax planning, tax avoidance, tax evasion or tax management : (a) Sunny directly paid for a property purchased in the name of Harpree

Answer 5(b) a) Tax Evasion likely: Sunny directly paid for a property purchased in the name of Harpreet, his cousin sister. This is an attempt to conceal ownership and evade tax liabilities, possibly under the Benami Transactions Act. b) Tax Management: Jatin filed his ITR beyond due date of filing and to avoid further late filing fees. Filing a belated return to minimize penalties, late filing fees and comply with tax laws is tax management. c) Tax Avoidance: B Limited merged its one of the unit, running into losses, to C Limited, a profit making company to transfer the claim of business losses against a cash consideration. Structuring a merger solely to transfer business losses for tax benefits, without genuine commercial purpose, is tax avoidance. It is a sham transaction with only motive of avoiding taxes though it is in a legal way and hence is a case of tax avoidance. It should be noted that saving of taxes in such a way by the assessee is not the intent of the law. d) Tax Planning: Metro Fashion, running into the Non SEZ area is in the process of shifting to SEZ area by importing the machines required. Shifting to an SEZ area to avail tax exemptions and benefits under Section 10AA is a legitimate tax planning strategy. e) Tax Avoidance: Transferring a property to a spouse without adequate consideration to reduce the overall tax liability is an attempt of Tax avoidance and falling under clubbing provisions (Section 64 of the Income Tax Act). Although, there is a specific anti-tax avoidance measure (SAAR) for the same that is of deemed ownership, by virtue of which, assessee will continue to be the owner of the house being transferred to spouse without consideration and; eventually the rental income will the taxable in his hands itself, making his intent of tax avoidance unsuccessful.