Question:
Mr. X deposits ₹65,000 in a term deposit for 5 years with the Post Office to avail tax deduction under Section 80C. Assuming Mr. X does not opt for the concessional tax regime under Section 115BAC. What is the correct option?
Mr. X deposits ₹65,000 in a term deposit for 5 years with the Post Office to avail tax deduction under Section 80C. Assuming Mr. X does not opt for the concessional tax regime under Section 115BAC. What is the correct option?
Updated On: Nov 26, 2025
- Mr. X is guilty of tax evasion/tax avoidance
- Mr. X is not guilty of either tax evasion/tax avoidance
- No tax deduction can be availed under Section 80C
- It is an unlawful act to treat as personal expenditure
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The Correct Option is B
Solution and Explanation
Mr. X’s action of depositing Rs. 65,000 in a 5-year term deposit with the Post Office to avail tax deductions under Section 80C is a legitimate and lawful way to reduce his tax liability. Tax evasion involves illegal activities to avoid paying taxes, such as not reporting income or filing false returns. Tax avoidance refers to legal methods of reducing one’s tax liability. Mr. X is utilizing a legal provision to reduce his tax burden, which is not considered tax evasion or avoidance.
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