An exercise undertaken to minimise tax liability through the best use of all available allowances, deductions, exclusions, exemptions, etc., to reduce income-tax liability is known as —

CS Executive · Tax Laws and Practice · PYQS · December 2014
An exercise undertaken to minimise tax liability through the best use of all available allowances, deductions, exclusions, exemptions, etc., to reduce income-tax liability is known as —
(A) Tax evasion
(B) Tax planning
(C) Tax avoidance
(D) Tax dodging.

Answer & Explanation:

Correct Answer: Option (B)

Correct answer: (B) Tax planning. This answer applies to the historical law and assessment-year context of this December 2014 paper; later amendments may differ.

Topics: Income Tax Act, 1961

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