Knowing About Tax Shark

Tax evasion can be described as doing something within the law to lower your tax bill. Nobody owes some public obligation to pay more than the law requires, according to Learned Hand, an American judge. Tax evasion, on the other hand, is known as paying less tax than you are legally required to pay. While there is a fine line between the two, as former British chancellor Denis Healey once said, “the gap between tax avoidance and tax evasion is the thickness of a prison wall.” The courts agree that no taxpayer is obligated to structure his or her affairs in such a way that the government collects the most tax revenue possible. Individuals and companies have the right to take some legal action to reduce their tax burden. Have a look at Tax Shark to get more info on this.

A taxpayer can legally arrange her affairs to reduce her tax liability by deferring income from one year to the next. Taking all available tax deductions is legal. Giving to charity is also a legal way to stop paying taxes. Tax evasion, on the other hand, is considered a criminal offence. Tax avoidance usually entails failing to disclose income or claiming deductions that are not permitted. When a builder “forgets” to disclose the LKR 1, 000,000 cash he collects for building a pool, or when a business owner attempts to deduct LKR 1, 000,000 in personal expenses from his business taxes, or when an individual falsely says she made charitable donations, or greatly overestimates the value of property donated to charity, these are examples of tax evasion.

Similarly, if an estate is valued at LKR 5,000,000 and the executor files a false tax return, omitting property and saying the estate is only worth LKR 100,000, the executor would owe much less in taxes. Our tax system is impacted by tax evasion. It results in a substantial loss of income for the community, which could otherwise be used to support health, education, and other government services.