TAX EVASION AND TAX AVOIDANCE A DETAIL ANALYSIS

AUTHOR – R. ANEKA ABIRAMI* & MS. T. VAISHALI**, LLM SCHOLAR* & ASSISTANT PROFFESSOR** AT TAMIL NADU DR.AMBEDKAR LAW UNIVERSITY

BEST CITATION – R. ANEKA ABIRAMI & MS. T. VAISHALI, TAX EVASION AND TAX AVOIDANCE A DETAIL ANALYSIS, ILE MULTIDISCIPLINARY JOURNAL, 3 (1) OF 2024, PG. 269-280, APIS – 3920-0007 | ISSN – 2583-7230.

Abstract

Tax evasion and tax avoidance have major impacts on the Indian economy. Tax evasion involves participating in unlawful actions in order to evade paying all taxes. Tax avoidance and tax evasion both result in decreased government revenue, leading to potential limitations on government spending for infrastructure, social welfare, and development projects. Tax avoidance is when individuals legally use loopholes in tax laws to reduce how much tax they owe. Tax evasion and avoidance contribute to worsening income inequality and also erode public confidence in the taxation system. Previously, the tax evasion and tax avoidance of a sizable informal sector, ineffective tax administration, and complex tax laws have enabled tax evaders to prosper, leading to substantial revenue losses that have hindered the government’s ability to finance public services.  In the present circumstances, the Indian government has put in place various strategies to address tax avoidance and evasion. This involves enhancing tax laws, improving tax management, and using technology to boost compliance and transparency. This paper investigates various aspects of tax avoidance and tax evasion in the context of existing government regulations, strategies, and countermeasures, examining their impact on the Indian economy and the legal understanding of tax evasion and avoidance.

KEY WORDS: Tax payer, Tax evasion, Tax avoidance, Impact of economy, penalties.