TAX AVOIDANCE VS. TAX EVASION : A LEGAL PERSPECTIVE ON CORPORATE TAX PLANNING

AUTHOR –  PRIYAM KATIYAR* & DR. ARVIND KUMAR SINGH**

* STUDENT AT AMITY UNIVERSITY, LUCKNOW, UTTAR PRADESH

** PROFESSOR AT AMITY UNIVERSITY, LUCKNOW, UTTAR PRADESH

BEST CITATION – PRIYAM KATIYAR & DR. ARVIND KUMAR SINGH, TAX AVOIDANCE VS. TAX EVASION : A LEGAL PERSPECTIVE ON CORPORATE TAX PLANNING, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 5 (1) OF 2025, PG. 1437-1453, APIS – 3920 – 0001 & ISSN – 2583-2344.

ABSTRACT

Corporate tax planning serves as a crucial financial approach for companies, enabling them to effectively handle tax liabilities while ensuring adherence to legal standards. Nevertheless, the delicate boundary between lawful tax avoidance and unlawful tax evasion has sparked considerable legal, ethical, and economic discussions. Tax avoidance refers to the tactical employment of tax regulations, deductions, and loopholes to reduce tax commitments without infringing upon legal mandates. Conversely, tax evasion involves intentional misrepresentation, deceit, or concealment aimed at evading tax obligations, resulting in legal repercussions and harm to one’s reputation. This research paper offers an extensive legal examination of tax avoidance and tax evasion, scrutinizing their differences through statutory provisions, judicial interpretations, and regulatory frameworks across various jurisdictions.

It investigates how multinational corporations and large businesses utilize intricate tax arrangements, offshore accounts, and transfer pricing strategies to lower their tax liabilities while operating within or outside legal limits. The study also evaluates the influence of international tax treaties, anti-avoidance legislation, and regulatory bodies in tackling aggressive tax planning and combating tax evasion. Moreover, the paper underscores the ethical factors related to corporate tax planning, addressing the wider implications for economic fairness, government income, and corporate social responsibility. As governments globally enhance tax enforcement strategies and implement more stringent regulations, it becomes vital to grasp the shifting legal environment surrounding corporate taxation. Through a comparative legal viewpoint, this study aspires to contribute to policy dialogues regarding tax reforms, corporate accountability, and the necessity for a balanced strategy that ensures tax effectiveness while deterring system misuse.

Keywords: Tax Avoidance, Tax Evasion, Legal Framework, Judicial Interpretation, Regulatory Compliance, Tax Liability, Anti-Avoidance Laws, Tax Ethics, Tax Policy, International Taxation.