ECONOMICS
FISCAL POLICY
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
____ legal but frowned upon.
|
|
|
____ illegal.
|
|
|
____ when low earners do not have to pay tax.
|
|
|
____ when you miss the self-assessment deadline.
|
Detailed explanation-1: -Although Tax avoidance is a legal method, it is not advisable as it could be used for one’s own advantage to reduce the amount of tax that is payable.
Detailed explanation-2: -However, tax evasion is illegal and Chapter XXII of the Income Tax Act, 1961, is clear about penalties. The Income Tax Act has introduced several penalties for individuals attempting to evade paying income taxes. The penalties for such acts are severe, ranging from 100% to 300% of the tax for undisclosed income.
Detailed explanation-3: -uncountable noun. Tax avoidance is the use of legal methods to pay the smallest possible amount of tax.
Detailed explanation-4: -Tax avoidance involves the legal exploitation of the tax laws to one’s advantage. Every attempt by legal means Prevent or reduce tax liability which would otherwise be incurred by taking advantage of some provisions in the statute of the country.