A Study On Tax Planning For Salaried Employees and Strategies For Tax Saving Scheme
A Study On Tax Planning For Salaried Employees and Strategies For Tax Saving Scheme
SCHEME
Dr.R.SIVASANKAR
Assistant professor, Department of commerce, Vivekananda College, Agasteeswaram.
Mrs. N.O.ANITHA
Ph.D.,Scholar,Reg.No: 19223271012003, Commerce Research Centre, Vivekananda College,
Agasteeswaram. Affiliated to Manonmaniam Sundaranar University, Abisekapatti,
Tirunelveli – 627012,Tamil Nadu, India.
ABSTRACT
A tax plan is about that particular person’s income for that year. Tax planning is not tax
avoidance but saving tax without violating any legal rules. Tax planning is very important in
the life of every salaried employee. As far as India is concerned, salaried employees have to
pay more tax next to businessmen. The government provides many allowances, deductions and
investment schemes for salaried employees who pay tax. The salaried employees should design
their own investment and saving schemes according to their needs for tax saving .Tax planning
is important when it comes to tax saving. Financial planning is an essential part of tax planning.
Tax planning helps to reduce the tax liability of every salaried employee so all salaried
employees should be aware advantages of exemptions and deductions. Primary and secondary
data collection method was used for this study and random sampling method was applied to
collect data.
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Key words: Tax planning, Tax savings, Investment schemes, Strategies, Salary,
INTRODUCTION
Each salaried employee should plan their tax according to their income. How salaried
employees do their tax planning can understand their investment tendencies. Every salaried
employee should be aware of the allowances and exemptions provided by the government
according to their income. Through this research it is possible to understand how much salaried
employees are aware about the allowances, exemption limit and investment schemes provided
by the government. Correct tax planning helps to fulfill many financial needs of employees.
Tax planning is about choosing which investment scheme to invest into save tax for the
employee. Advance tax planning can help increase the saving tendency of every employee. As
the saving tendency of the employees increases, it becomes easier to meet their needs. The tax
planning of salaried employees should be done according to the rules and regulations
mentioned in the income tax act 1961. Income tax rules and regulations change every year and
therefore the tax plan should be changed every year. The income tax act introduces
amendments to direct tax laws. The rates of income tax for a current assessment year, rates for
deduction of tax at source and advance payment tax for the said accounting year are fixed by
REVIEW OF LITERATURE
Geethu Gopi and Priyanka (2018) were of the opinion that investment is an activity confined
to specific financial aims of investors. The study attempts to understand the investment
preference of salaried group of people working in the private sector in shipping industries. The
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Research paper © 2012 IJFANS. All Rights Reserved, UGC CARE Listed ( Group -I) Journal Volume 11, Iss 12, Dec 2022
findings suggest that most of the employee’s savings are directed to their personal expenses
Arora Monika (Research Scholar, 2019) research paper is related with sensitive and personal
financial aspects of individual income tax assesses. The researcher to undertaken an empirical
research on the topic to identify the factors that influence the individual assesses to invest in
tax saving schemes and scope for further investment. Depending upon their risk appetite, an
increase has been witnessed in number of investment avenues available for investors.
Neha Agarwal, (2020) state that tax planning is an essential part of our financial planning. The
main purpose of the study is to find out regarding the awareness and alternatives of the tax
planning
Bindabel and Hamza, (2021) state that the main objectives of the study was to find out the
relationship between savings and investment pattern and orientation towards finance among
the working women at the universities of Saudi Arabia. Orientation towards finance,
Dr.N.Sravathi and L.Anitha, ( 2021 ) have analysed the awareness of tax saving schemes
among salaried employees. The study identified that majority of the respondents were aware
of recognized provident fund because it is deducted directly from the salary.the study suggested
that the individuals expecting an increase in the amount of deductions under u/s 8OC.
Antu Thomas, (2021) did a study on awareness levels of salaried individuals about tax
planning. He found that salaried individuals do not know are facing E-failing problems. They
suggest that e-filing should be popularized. He also felt that different employee suggests that
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R.Yuvaraj (2022) have analysed a study on financial planning for salaried employees and
strategies for tax savings. The study reveals that most of the salaried employees are not aware
about the benefits of tax saving investments like ULIPS, NPS and NSC, Life insurance, health
insurance as well as PPF are the popular investment options. The study provide the suggestion
Jyoti Sing, Divyesh Solanki and Sonakshi Sharma (2023) have analysed a study on financial
planning for salaried employee and strategies for tax saving. The study reveals that majority of
the respondents prefer regular return plan as a choice for their future. The study concluded
there is differentiation in income tax act 1961 among male and female both, residents of
PROBLEM STATEMENT
Tax planning is important for every assessee to reduce their tax liability and compliance
with the income tax rules. To enjoy the benefits of tax planning, the assessee must know
different provisions of tax saving schemes available in the laws. Savings taxes can be a
complicated process if not planned well in advance. Planning your taxes at the last moment
leaves little time for you to study different investment options. It may also become a burden to
1. To study on tax planning for salaried employee and strategies for tax saving schemes.
3. To study on the level of awareness of the salaried employee on various investment schemes.
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Research paper © 2012 IJFANS. All Rights Reserved, UGC CARE Listed ( Group -I) Journal Volume 11, Iss 12, Dec 2022
The scope of the current study is limited to the salaried assesses in the State of Tamil
Nadu. The study evaluate and analyses the tax planning strategies and awareness thereof,
saving habits, investment choices, outflow of liabilities adopted by the salaried assesses in
Tamil Nadu for the period covered under study. The income in the study encompasses salary
income, income/loss from house property and income from other sources viz interest on bank
RESEARCH DESIGN
Salaried assesses employed in the State of Tamil Nadu constituted the population for
the study. Sample selection was done on a purposive basis. The sample comprised of
employees engaged in public and private sectors in the State of Tamil Nadu totalling 105 tax
return files for assessment year 2022-2023. The sample includes a wide spectrum of public and
private sector employees. Public sector employees included employees of Central Government,
State Government and public sector undertakings. The private sector employees included those
Telecommunication and aeronautical structures media and publicity and other manufacturing
limits.
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5% 10%
10% below30
30-40
40-50
35%
50-60
40%
above 60
It is observed from the above figure that 40 per cent of the salaried employees are in the age
group of 30-40 years, 35 per cent of the salaried employees are in the age group of 40-50 years.
It is inferred that majority of the salaried employees belong to the age group of 30-40 years.
2. Employment details
others 25%
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Research paper © 2012 IJFANS. All Rights Reserved, UGC CARE Listed ( Group -I) Journal Volume 11, Iss 12, Dec 2022
The above figure reveals that out of 105 sample respondents, 45 per cent respondents working
in public sectors and 30 per cent respondents working in private sectors. It is inferred that
3. Monthly salary
As per figure given above 40 per cent salaried employees earn monthly salary is ₹50000 - ₹
4. Income of respondent
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Research paper © 2012 IJFANS. All Rights Reserved, UGC CARE Listed ( Group -I) Journal Volume 11, Iss 12, Dec 2022
40% 34%
30% 26%
22%
20%
10%
10%
8%
0% Series1
Series1
As per figure given above 34 per cent respondents income slab is ₹ 250000 - ₹ 500000, 26 per
The above figure reveals that out of 105 sample respondents, 35 per cent respondents assets
owned in life insurance and 24 per cent respondents assets owned in provident fund. It is
inferred that majority of the respondents select the save tax in choose life insurance
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Research paper © 2012 IJFANS. All Rights Reserved, UGC CARE Listed ( Group -I) Journal Volume 11, Iss 12, Dec 2022
1. The study reveals that the majority (40 per cent ) of the respondents belong to
2. The study indicates that the majority (45 per cent ) of the respondents are work in public
sector
3. The study observes that the majority (40 per cent ) of the respondents are earn 50000-
100000
4. The study finds that the majority ( 34 per cent ) of the respondents are earn income
250000-500000
5. The study reveals that the majority (35 per cent) of the respondents are assets owned in life
insurance
CONCLUSION
This chapter discussed how important it is to save tax in the tax planning. Tax planning
is not tax avoidance but a method to educate employees on how to save tax. Tax awareness is
the employee knowledge about different tax saving schemes. Government has provided many
investment schemes to salaried employees to save tax. Through this lesson the employees will
understand about which investment scheme is better to invest in which investment scheme can
save tax.
REFERENCE
Geethu Gopi and Priyanka. (2018). An Insight Into The Savings and Investment Pattern of
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IJFANS INTERNATIONAL JOURNAL OF FOOD AND NUTRITIONAL SCIENCES
ISSN PRINT 2319 1775 Online 2320 7876
Research paper © 2012 IJFANS. All Rights Reserved, UGC CARE Listed ( Group -I) Journal Volume 11, Iss 12, Dec 2022
Arora Monika (Research Scholar, I.P.T.U.(2019). April Month Milestone. Pacific B Usiness
9(5), 68-74.
Bindabel and Hamza (2021), ‘ Relationship between saving and investment pattern and
orientation towards finance among working women in the universities of Saudi Arabia’,
Antu Thomas ( 2021) , ‘ Awareness levels of salaried individuals about tax planning ,’
journal of emerging technologies and innovative research ( JETIR) Vol. No.8(2) www.jetir.org
ISSN: 2581-3889.www.theijbmt.com
R.Yuvaraj ( 2022). Astudy on financial planning for salaried employees and strategies for
Jyothi singh, Divyesh Solanki,and Sonakshi Sharma (2023). A study on financial planning
for salaried employees and strategies for tax savings. International Research Journal of
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