Tax mitigation is a situation where the taxpayer uses a fiscal incentive (tax concession) available to him in the tax legislation so that he need not pay tax. An example of tax mitigation is the setting up of a business by a corporate in Special Economic Zone (SEZ) to claim a tax exemption (sun rise clause). In such a case, the taxpayer is taking advantage of a fiscal incentive in the form of a tax concession offered to him in the SEZ provisions in the Income-tax Act.
