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6.3 Taxation - Coggle Diagram
6.3 Taxation
Tax Avoidance
Income disclosed but used legal loopholes to avoid taxes
e.g. registering company in Tax Haven - legal but unethical
Double Taxation Avoidance Agreement
Place of Effective Management
for Indian company operating via shell company outside
40% Corporate Tax + Cess + Surcharge
Base Erosion and Profit Shifting
Transfer Pricing
Authority for Advance Rulings
for query via company
General Anti-Avoidance Rules
for notice to company
Global Minimum Tax
G7 framework
2 Pillar Solution
Retrospective Tax
Terms
Hawala
illegal money transfer/remittance
to avoid Indian CG Tax -> back as FDI -> called
Round Tripping
Shell/Post-box/Letter-box Companies
Tax Haven
Black Money
unreported taxable Income/transaction
Parallel Economy - run on Black Money
Tax Planning/Tax Mitigation
neither illegal nor unethical
Orgs
Enforcement Directorate
FinMin -> Department of Revenue
power from FEMA & PMLA
Directorate of Revenue Intelligence
Financial Intelligence unit
Financial Action Task Force
G7 brainchild
Money laundering and terror finance
Organisation for Economic Co-operation and Development
Tax Evasion
hiding taxable Income/transaction(can be from Money Laundering also) to avoid taxes - Illegal
Money Laundering - disguising source of money
PMLA -> ED -> search-seizure-arrest-penalty
PMLA Appellate Tribunal ->
HC
Undisclosed Foreign Income & Assets Act
Benami Transactions Prohibition Act
Misc
Laffer Curve
Tax Buoyancy
% Income Tax Inc/% of GDP grown -> >1 = Good
FC
read from notes
Tax Terrorism/Harassment