State with reason, whether the following acts can be considered as an act of Tax Planning, Tax Management, Tax Avoidance or Tax Evasion : (d) Mr. D is a working partner in a firm and he is entitled to a salary of ₹30,000
CS Professional · Advanced Tax Laws and Practice · PYQS · December 2019
State with reason, whether the following acts can be considered as an act of Tax Planning, Tax Management, Tax Avoidance or Tax Evasion : (d) Mr. D is a working partner in a firm and he is entitled to a salary of ₹30,000 per month. He treats this as salary instead of business income.
Answer & Explanation:
Tax Evasion because Mr. D tries to reduce his tax liability by misrepresenting the income as salary instead of business income, thereby claiming standard deduction.
Topics: Income Tax Act, 1961
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