“ETHICS OF TAX PLANNING: WHERE DOES LEGITIMACY END AND ILLEGALITY BEGIN?

AUTHOR – MARKANDEY KUMAR MANISH* & DR. LAKSHMI PRIYA VINJAMURI**

* LAW STUDENT, LAW COLLEGE DEHRADUN, UTTARANCHAL UNIVERSITY, DEHRADUN

** ASSISTANTPROFESSOR AT LAW COLLEGE DEHRADUN, UTTARANCHAL UNIVERSITY, DEHRADUN

BEST CITATION – MARKANDEY KUMAR MANISH & DR. LAKSHMI PRIYA VINJAMURI, “ETHICS OF TAX PLANNING: WHERE DOES LEGITIMACY END AND ILLEGALITY BEGIN?, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (6) OF 2026, PG. 692-698, APIS – 3920 – 0001 & ISSN – 2583-2344.

ABSTRACT

Tax planning has a complicated place in the context of fiscal jurisprudence, being at the border of the realm of legality and ethical duty. Although legal legitimate tax planning is accepted to be the legal way to reduce tax liability, the boundary between the fair and a crime tendency is not always clear. Judicial precedents and decisions vary in their purpose of differentiating permissible tax planning and colourable devices to avoid tax proposals, as seen in McDowell and Co. Ltd. v. CTO and Union of India v. Azadi Bachao Andolan. The current paper is a critical analysis of the ethical aspects of tax planning, and it raises the question as to whether adherence to laws is adequate when it comes to establishing legitimacy. It also examines the impact of aggressive tax planning activities on the zeal of tax laws, hampering government revenues, and confidence in the system. The paper states that such a balanced approach is necessary, which entails the incorporation of legal norms with ethical principles in taxation.