Tax planning is honest and right approach to attain the maximum...

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Tax planning is honest and right approach to attain the maximum benefit of taxation laws within its framework only. Objectives of tax planning are:
1. Productive investment
2. Un-healthy growth of economy
3. Minimisation of litigation
4. Increase in tax liability.

A. 1, 2 and 3

B. 1 and 3

C. 1, 2 and 4

D. 1, 2, 3 and 4

Answer: Option B


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List out from the given statements the important ethical principles that a business should follow:
1. To take the necessary action for the development of the concerned industry or business
2. Pay taxes and discharge other obligations promptly
3. To ensure the best utilisation of the human resources
4. Refrain from secret kickbacks or pay-offs to customers, suppliers, administrators, etc.
5. Ensure payment of fair wages and fair treatment of employees

A. 3, 4 and 5

B. 2, 4 and 5

C. 1, 2 and 3

D. 1, 3 and 5

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Statement (I): If the tax liability has been reduced within the legal framework, it is tax planning.
Statement (II): If tax liability has been reduced to get benefit of deduction available under the income tax, it is called tax evasion.
In the context of the above two statements, which one of the following is correct?

A. Both the Statements (I) and (II) are correct

B. Statement (I) is correct, but (II) is incorrect

C. Both Statements (I) and (II) are incorrect

D. Statement (II) is correct, but (I) is incorrect

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