Specify whether the following acts can be considered as (i) Tax planning; or (ii) Tax management; or (iii) Tax evasion. P deposits ₹1,00,000 in Public Provident Fund (PPF) account so as to reduce his total income from ₹3
CS Professional · Advanced Tax Laws and Practice · PYQS · December 2018
Specify whether the following acts can be considered as (i) Tax planning; or (ii) Tax management; or (iii) Tax evasion. P deposits ₹1,00,000 in Public Provident Fund (PPF) account so as to reduce his total income from ₹3,40,000 to ₹2,40,000.
Answer & Explanation:
Depositing an amount to the Public Provident Fund 'PPF' in order to reduce the total income and tax liability is an act of Tax Planning. Therefore, deposit of ₹1,00,000 in 'PPF' by P to reduce his total income from ₹3,40,000 to ₹2,40,000 is an act of Tax Planning.
Topics: Income Tax Act, 1961
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