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Abstract
Tax is the compulsory contribution by the public and it is a primary source for the government revenue. The revenue generated by the government is used for overall development and prosperity of the country. Tax evasion means evasion of paying taxes illegally. Tax evasion is a serious threat which hampers the economic development to a greater extent as majority of the welfare measures undertaken by the government are funded by the taxes collected. The paper studies abouttax evasion and tax avoidance. Both tax evasion and tax avoidance lead to making a country’s tax system unfavourable as both of these reduce the government’s revenue source, but the former reduces the income flow for the government significantly.This research paper focuses on highlighting the causes of tax evasion and avoidance and also suggests a few measures to resolve this issue by tax planning and there by paving way for the growth of the country.