Amrin (Chartered Accountant) (215 Points)
19 December 2013Dear Professionals,
Was just wondering, if an assesee pays rent to his father and then claims it to be an HRA exemption u/s 10(13) then it will be a good escape from tax.The provisions of Section 10(13) does not specify about disallowance of exemption if paid to any "relative".
So was just wondering if this will be termed as "TAX PLANNING" or "TAX EVASION" 
Ruchika Ravi
(CA Final Student)
(110 Points)
Replied 21 December 2013
Hello
Tax evasion involves breaking the law (e.g Not paying taxes when law clearly states that it must be paid)This includes illegal tax avoidance.Whereas tax planning is a case wherein a person finds out the loops and holes and plans and invests his income in such a way that it gets exempted without breaking the law(e.g Postponing income recognition)
In the above case the loops and holes of are found out and accordingly planned..Henceit is absolutely not tax evasion..
IT IS TAX PLANNING..
Amrin
(Chartered Accountant)
(215 Points)
Replied 21 December 2013
hehe
surely.. and a good one in it :D
Thanks :D
CAclubindia
