Mohd Feroz. CAT3 ACJ

SESSION: 2021-2022
Administration of Criminal Justice
CAT 3
TOPIC: TAX EVASION
Submitted To:-
Vinayak Pandey Submitted By-
Assistant Professor MOHD FEROZ
BALB4033 18GSOL1020122
BA LLB
8th Semester
Sec- B
What is Tax Evasion?
Tax Evasion is an illegal way to decrease tax legal responsibility through

fraudulent strategies like planned underneath-announcement of taxable income or
inflating fees. it's far an illegal try to reduce ones tax burden. Tax Evasion is
achieved with a cause of displaying fewer profits on the way to keep away from
tax burden. It entails unlawful practices including making false statements, hiding
relevant documents, no longer preserving complete records of the transactions,
concealment of profits, overstatement of tax credit score or providing personal
prices as business prices. Tax evasion is a criminal offense for which the assesse
can be punished underneath the law.
Tax evasion is the illegal non-payment or under-payment of taxes, usually by
deliberately making a false declaration or no declaration to tax authorities – such as
by declaring less income, profits or gains than the amounts actually earned, or by
overstating deductions. It entails criminal or civil legal penalties. Tax avoidance is
the legal practice of seeking to minimise a tax bill by taking advantage of a loophole
or exception to the rules, or adopting an unintended interpretation of the tax code. It
usually refers to the practice of seeking to avoid paying tax by adhering to the letter
of the law but opposed to the spirit of the law. Proving intention is difficult; therefore
the dividing line between avoidance and evasion is often unclear.
Why it matters?
Tax evasion is facilitated via complicated and opaque company structures and
hidden business enterprise ownership. Governments need to set up mandatory,
public registers that divulge the beneficial possession of believe budget and groups
to hint the waft of dirty cash less complicated. better company transparency gives
statistics that may monitor behaviour.
What are the cause of tax evasion?

1. High charge of taxation:
excessive charge of taxation cause a burden to tax payer. So, they locate approaches
to avoid tax.
2. Failure to diminish bribery:
There should be ok gadget to slash bribery and corruption among officials. They
help taxpayers to avoid tax by using taking an agreed percentage of profit out of
evaded tax.
3. Lack of simplified strategies:

Tax shape in India is complicated and people find it hard to visit unique departments
for a single remember.
lifestyles of large number of taxes:
4. Existence of huge range of various kind of taxes reasons burden on taxpayers.
5. Complicated tax laws and loopholes to keep away from tax in laws:
Indian tax law is complicated. in the identical regulation, humans discover
provisions to get away from tax liability.
6. lack of prepared and systematic management shape.
7. Frequent changes in authorities and Political instability:
common changes and political instability is another purpose of non-implementation
of nicely-described tax gadget. exceptional governments enforce special tax machine
and it turns into hard to follow.
8. Common changes in tax rules:
Tax rules in India are changed frequently by way of authorities. It creates confusion
among tax payers and officials about the relevant provisions.
9. Deficiencies in imposing Penalty Provisions.
How tax evasion is done?
Wielding Capital Expenditure:

one of the measures for evasion of tax is extra calculation of belongings whose value
is fixed which facilitates to reduce business advantage and thereby increment in the
depreciation.
Changing the logbook:

The most used strategies leading into tax evasion. in this degree basically the
manipulation of receipts takes location and income associated with alternate are
diverted to some other body of the association which might be present in some
different jurisdiction, because of which the problem turns into the issue of worldwide
taxation. via this approach the affiliation attempts to circumvent tax by using hiding
the actual logbook and show lower earnings than the actual one. And sometimes this
occurs that if the entity is present in some kingdom where decrease tax charges are
imposed than the employer succeeds in paying lower taxes than it should pay. some
other similar way is to expose lower production charges than the original one this
also allows to decrease the unpaid tax amount.
Dealings close Out of record:

This method is famous amongst small scale trading. that allows you to live away
from paying taxes and conceal the real profits to enterprise from the authorities of
tax, the firms keep specific books of record that they use to befool the government,
in one of the logbooks the actual quantity is stated that is only used by the buyers
and in different report they are trying to make fake entries a good way to pay less
tax relatively.
Lower effect laws associated with tax:

The laws of taxes in state like ours are too fragile and because of the complexity and
ambiguity they may be absolutely not noted via individuals this is why such sort of
crimes like evasion of taxes, locate their manner in India effortlessly.
Excessive Tax Imposition:

In India there are conditions where very massive quantity of tax are imposed on
individuals. In corporate sector that is seen very effortlessly because the imposed tax
are manner much higher that is why they get more margin for dodging tax.
Changes in first-class of Product:

in this approach the uncooked product that's imported for a business are to be faked
within the listing of accounts by changing the excellent of the goods this genuinely
allows in tax evasion because the actual prices are saved hidden by means of doing
so.
Transactions made out of us of a:

in this technique the profits on which tax is imposed is one way or the other
transferred to one of the entities of the equal business which situate outdoor the usa
or in every other united states of america in which the tax costs are comparatively
decrease.
Giving budget to Political parties:

This method results in reduce the amount of payable tax as tons of the amount is
showed to be donated as price range for some political issues by means of massive
agencies so as to expose them in their logbooks and steer clear of tax.
Excessive Corruption:
through non-stop dodging of tax through some business entities they manipulate to
collect a excessive quantity of unlawful profits which is in addition used for dodging
taxes when the costs of tax is going up.
The use of earnings for Agricultural reason:

Many corporations switch their generated profits to agricultural area owned by way
of them which allows them to pay much less quantity of tax and ends in crime of tax
evasion.
Impact of Tax evasion
• Less payment of tax:

that is the primary and major impact that's laid down through tax evasion. this is
someway predictable to us that whoever do tax evasion will now not pay the full tax
and due to this act government gets not able to fulfil the fund requirement for growth
and improvement and that is one of the reasons that GDP falls down.
• Increase in Corruption activities:

we are able to say that corruption or deceit is a motive and impact for evasion of tax,
in view of the fact, because of corrupt intentions and to form extra cash humans do
evasion, and by means of seeing every other individual doing tax evasion human
beings get recommended to try this and they exercise such form of activities simply
in greed of more money making they generate this type of unlawful cash.
Increment of insufficiency:
due to evasion of tax the illicit business gets more urge and this is why the people
get disadvantaged from the necessities for their growth and evolution. due to this
rich humans simply save the money and enjoy to the fullest but the situations of
negative human beings get extra worse.
Problem on other Tax payers:

through all this tax evasion and avoidance completed via such evaders there is no
other manner remains for authorities but to growth the similarly tax rates, and
because of this the honest tax payers suffer a lot and poverty will increase via these
kind of sports.
CASE LAW
R.K Garg vs. UOI
In the present case the question upon the measure taken by government i.e disclosure
of having possession of black money, was challenged. In this case the contention
was raised that this measure is taken only to avoid the crime related to tax evasion
which are becoming the white collar crimes and this is not to encourage such kind
of activities because this will help only to get back all the money which has been
taken over and hide by the people.
This was just an initiative to disclose all that money which has been taken wrongfully
by the criminals through tax evasion. This was later considered as a helpful measure
because it ultimately helps in stopping such kind of things as the Indian govt. Does
not have complete set of effective rules that is why it is to be considered a good
method.
.
References
TAXMANN'S STUDENT GUIDES

Wikipedia.com
Taxguru.con

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SESSION: 2021-2022

Administration of Criminal Justice

Assistant Professor MOHD FEROZ

Tax Evasion is an illegal way to decrease tax legal responsibility through

What are the cause of tax evasion?

3. Lack of simplified strategies:

How tax evasion is done?

Wielding Capital Expenditure:

Changing the logbook:

Dealings close Out of record:

Lower effect laws associated with tax:

Excessive Tax Imposition:

Changes in first-class of Product:

Transactions made out of us of a:

Giving budget to Political parties:

The use of earnings for Agricultural reason:

Impact of Tax evasion

• Less payment of tax:

• Increase in Corruption activities:

Problem on other Tax payers:

TAXMANN'S STUDENT GUIDES

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