From UPSC perspective, the following things are important :
Prelims level : Tax Sheltering
Mains level : Not Much
This newscard is an excerpt from an original article published in TH.
We can expect a statement based question comparing Tax Shelters and Tax Heavens.
What is a Tax Shelter?
- A tax shelter is a financial vehicle that an individual can use to help them lower their tax obligation and, thus, keep more of their money.
- It is a legal way for individuals to “stash” their money and avoid getting it taxed.
- A tax shelter is entirely different from a tax haven because the latter exists outside the country and its legality can, at times, be questionable.
- A tax shelter, on the other hand, is entirely legal and keeps all monies within an individual’s home country.