Consider the following statements 1 Tax planning is not essential for...

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Consider the following statements.
1. Tax planning is not essential for every assessee, while tax management is essential for every person, otherwise he may be liable for penal interest, penalty and prosecution.
2. In tax planning alternative economic activities are studied and an activity with least incidence of tax is selected. Where as tax management includes maintenance of accounts in prescribed form. Get these audited, filling the required forms and returns, payment of taxes etc.
3. Tax planning always done in isolation.
4. Tax planning is guide in decision making, while tax management is a regular feature of an undertaking.
Which of the statement(s) given above is/are correct?

A. Both 1 and 2

B. Only 1

C. 1, 2 and 4

D. 2, 3 and 4

Answer: Option C

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Statement (I): If the tax liability has been reduced within the legal framework, it is tax planning.
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