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S William
Yuna D
A Ahmed
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S William
Yuna D
A Ahmed
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Global Journal of Accounting, Economics and Finance

Vol. 1(1)

Full length Research paper

Reality and Myth of imbricating ideas of assessment evasion and avoidance

*Yuna D, S William and A Ahmed

Department of Accounting and Finance, Faculty of Social Sciences, Delta State University, Abraka


The difference between tax avoidance and tax evasion is the thickness of a prison wall. “Human beings are greedy by nature and they want to extract the maximum out of what is potentially available to them, but there are ways of this extraction. Every way need not be wrong, though most of them are.” The difference between tax avoidance and tax evasion is that tax avoidance is legally permissible by law while tax evasion is not. Judicial pronouncements within India and outside India have always marked out this distinction between the two. The predominant feature in deciding the nature of any transaction is not the underlying motive but the legality of such transaction. In India till now, the difference between tax avoidance and evasion was very clear. In India, the law is settled that tax avoidance is legal and evasion is not. A taxpayer may create a device to arrange his commercial affairs to minimize his tax liability and its acceptance is based on operation of law. But the new proposed code has blurred distinction to a great extent. This Article tries to analyze this difference and the change in the scenario as would be brought by the proposed code.

Key words: Tax Avoidance, tax evasion, legality, human nature, tax avoidance v. tax evasion, tax planning, judicial interpretation, direct tax code-India (DTC-India), objectivity, general anti-avoidance rule (GAAR).