Final answer:
The correct answer is 'd) Tax planning' which refers to the legal techniques used to minimize taxes payable. Tax planning allows individuals and businesses to utilize strategies that can reduce their tax liability, which is distinct from tax avoidance or tax evasion.
Step-by-step explanation:
Generally, whenever a taxpayer can accelerate a tax deduction without accelerating the cash outflow, the tax planning strategy will be beneficial. This approach involves using legal methods to minimize one's tax liability. By adopting certain technologies or strategies that enable faster deductions or credits without necessitating immediate cash payments, companies and individuals can leverage tax planning to improve cash flow and reduce overall taxable income.
Tax planning should not be confused with tax avoidance or tax evasion. Tax avoidance is the legal usage of the tax regime to one's own advantage, to reduce the amount of tax that is payable. Tax evasion, on the other hand, is an illegal practice where a person, organization or corporation intentionally avoids paying a true tax liability.
Companies may also employ strategic tax planning within the bounds of the law to reduce tax burdens. This is often done through business decisions that provide tax benefits, such as investments in technology or processes that not only contribute to business efficiency but can also result in lower tax liabilities.