Tax Evasion

Tax Evasion involves intentionally avoiding tax obligations through fraudulent means such as underreporting income, hiding assets, or falsifying records. It is a criminal offense and can result in severe penalties, including fines and imprisonment. This is different from tax avoidance, which uses legal methods to reduce tax liability. For startups, maintaining accurate financial records and complying with tax regulations is essential to avoid legal risks and maintain credibility with investors and authorities.