Tax Planning: lawful use of statutory incentives contrasts with avoidance schemes and illegal tax evasion methods. Tax planning is the lawful use of statutory exemptions and concessions to reduce tax liability; it is legitimate when transactions comply with legislative conditions. Tax avoidance spans genuine arrangements to aggressive devices that frustrate legislative purpose. Tax mitigation involves taking fiscal incentives while accepting their conditions and economic consequences. Tax evasion denotes illegal acts-misrepresentation, falsification or fraud-that create and use unaccounted funds and violate tax laws.