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A Study On Tax Planning For Salaried Employees and Strategies For Tax Saving Scheme

This document summarizes a study on tax planning strategies for salaried employees in India. It discusses how tax planning is important for salaried employees to reduce their tax liability legally. It reviews past literature on tax planning and investment preferences. The objectives of the study are to analyze saving and investment behaviors and awareness of tax saving schemes among salaried employees. The scope is limited to salaried individuals in Tamil Nadu. Primary and secondary data was collected through random sampling of 105 tax returns for the 2022-2023 assessment year.

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0% found this document useful (0 votes)
103 views10 pages

A Study On Tax Planning For Salaried Employees and Strategies For Tax Saving Scheme

This document summarizes a study on tax planning strategies for salaried employees in India. It discusses how tax planning is important for salaried employees to reduce their tax liability legally. It reviews past literature on tax planning and investment preferences. The objectives of the study are to analyze saving and investment behaviors and awareness of tax saving schemes among salaried employees. The scope is limited to salaried individuals in Tamil Nadu. Primary and secondary data was collected through random sampling of 105 tax returns for the 2022-2023 assessment year.

Uploaded by

Chaitanya Talole
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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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

A STUDY ON TAX PLANNING FOR SALARIED

EMPLOYEES AND STRATEGIES FOR TAX SAVING

SCHEME

Dr.R.SIVASANKAR
Assistant professor, Department of commerce, Vivekananda College, Agasteeswaram.

Affiliated to Manonmaniam Sundaranar University, Abisekapatti, Tirunelveli – 627012,


Tamil Nadu, India.

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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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

Key words: Tax planning, Tax savings, Investment schemes, Strategies, Salary,

Employee, Person, Assessee.

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

this income tax act.

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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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

findings suggest that most of the employee’s savings are directed to their personal expenses

like children’s education and marriage.

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,

(ORTOFIN) is ones attitude towards effectively managing

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

tax rate should be lowered.

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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

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

is identify what you needs, wants and savings.

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

different geographic demographics are treated as equal.

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

invest a lump sum amount to save tax.

OBJECTIVES OF THE STUDY

1. To study on tax planning for salaried employee and strategies for tax saving schemes.

2 To analyse the saving investment behaviour of the salaried employees.

3. To study on the level of awareness of the salaried employee on various investment schemes.

SCOPE OF THE STUDY

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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

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

deposits etc. For the purpose of the study

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

working in the pharmaceutical sector, information technology, Multinational Corporation in

Telecommunication and aeronautical structures media and publicity and other manufacturing

limits.

DATA ANALYSIS AND INTERPRETATION

1. Age of the respondents

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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

valid per cent

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

valid per cent

others 25%

private sector 30%

public sector 45%

0% 10% 20% 30% 40% 50%

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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

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

majority of the respondents working in public sectors.

3. Monthly salary

valid per cent


45%
40%
35%
30%
25%
20% 40% valid per cent
15% 30% 30%
10%
5%
0%
500000-100000 100000-200000 above 200000

As per figure given above 40 per cent salaried employees earn monthly salary is ₹50000 - ₹

100000, 30 per cent salaried employees earn above ₹ 100000.

4. Income of respondent

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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

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

cent respondent income slab is ₹500000 - ₹ 750000

5. Types of financial Assets owned

valid per cent


4% 2%

12% fixed deposit


10%
life insurance
mutual funds
24% provident fund
post office investment
35%
public deposit scheme
13% equity investment

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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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

RESULTS AND FINDINGS

1. The study reveals that the majority (40 per cent ) of the respondents belong to

the age group of 30-40 years.

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

Salaried Employees Working in Private Sector of Shipping Industries at Ernakulam,

International Journal of Pure and Applied Mathematics, 118(18),1347-1363

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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

R Eview I Nternational, 136 / 2017-2 (Monthly),

Neha Agarwal (2020), ‘A Study on tax planning of salaried individual’, International

Mutidisciplinary Conference in, Technology, Business, Management&Liberal Arts, Vol. No.

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’,

Growing Science, Canada, Vol.No.7(1), PP 81-88

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

Dr.N.Sravathi,and L.Anitha (2021), ‘Awareness of tax saving schemes among salaried

employees ‘, The International Journal of Business Management and Technology, Vol.5(5)

ISSN: 2581-3889.www.theijbmt.com

R.Yuvaraj ( 2022). Astudy on financial planning for salaried employees and strategies for

tax savings.MBA PROJECT. https://sist.sathyabama.ac.in

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

Modernization in Engineering Technology and Science -ISSN:2582-5208.www.irjmets.com

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