A taxpayer legally arranges transactions to reduce tax without concealing income or falsifying records. What is this conduct called?
Correct answer: A. Tax avoidance
- A. Tax avoidance
- B. Tax evasion
- C. Tax assessment
- D. Tax withholding
Explanation
Tax avoidance uses lawful provisions or planning to reduce tax liability. Tax evasion involves unlawful concealment, false statements or other deliberate violations of tax law.
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About Taxation
Taxation covers the principles used to assess and collect taxes from individuals, businesses and transactions, with emphasis on income tax and sales tax concepts in Pakistan. Questions involve taxable income, exemptions, deductions, tax liability, withholding, returns, assessment, tax avoidance versus evasion, and the distinction between direct and indirect taxes.
Practise Taxation
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