Vijay, over the last 5 years has always paid tax on his income without availing himself of various deductions but now he has second thoughts. He reaches you for advise on tax planning mentioning that his income is Rs. 25 Lacs per annum and saves about 7 lacs every year. From now onward he does not have focus on any aspect, except ensuring that his tax liability is minimized. Vijay is very aggressive and does not mind to take risk. His wife, who is a banker also earns the same amount of money every year, is very conservative and does not wish to take risk. Just like her husband, she also wishes to minimize payment of income tax. Would your advice be same for both? Discuss. Vijay feels that tax planning and tax evasion would ultimately serve the same purpose. What is your advice on this viewpoint?
Vijay, over the last 5 years has always paid tax on his income without availing himself of
various deductions but now he has second thoughts. He reaches you for advise on tax
planning mentioning that his income is Rs. 25 Lacs per annum and saves about 7 lacs
every year. From now onward he does not have focus on any aspect, except ensuring
that his tax liability is minimized. Vijay is very aggressive and does not mind to take risk.
His wife, who is a banker also earns the same amount of money every year, is very
conservative and does not wish to take risk. Just like her husband, she also wishes to
minimize payment of income tax.
Would your advice be same for both? Discuss.
Vijay feels that tax planning and tax evasion would ultimately serve the same purpose.
What is your advice on this viewpoint?
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