UNIVERSITY OF MUMBAI

PROJECT REPORT ON
“INCOME TAX PALNNING WITH THE RESPECT OF INDIVIDUAL
SALARIED EMPLOYEES”

IN PARTIAL FULLFILMENT FOR MASTERS OF

COMMERCE
2019-20

PROJECT GUIDE
PROF.FARHAT SHAIKH

SUBMITTED BY
DIPALEE KACHARE

SPECIALISATION IN
TAXATION

MAHATMA EDUCATION SOCIETY’S

PILLAI’S COLLEGE OF ARTS, COMMERCE &SCIENCE
[AUTONOMOUS]
NEW PANVEL

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 UNIVERSITY OF MUMBAI
MAHATAMA EDUCATION SOCIETY’S
PILLAI COLLEGE OF ARTS, COMMERCE & SCIENCE (AUTONOMOUS)
NEW PANVEL

CERTIFICATE

To whom so ever it may concern

This is to certify that the work of DIPALEE KACHARE, Sem III M.com part II have
successfully completed a project report on, “INCOME TAX PALNNING WITH THE RESPECT OF
INDIVIDUAL SALARIED EMPLOYEES” terms of the academic year 2019-20 in the college norms
laid down by the college authority.

Project Guide : Prof. Farhat Shaikh M.com Co-ordinator : Gajanan Wader

Principal External Examiner

Date:
Place: PANVEL

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 DECLARATION

I, DIPALEE KACHARE student of “Sem III M.com Part-II”, MAHATMA

EDUCATION SOCIETY’S PILLAI COLLEGE OF ARTS, COMMERCE &
SCIENCE(AUTONOMOUS)”, hereby declare that I have completed the project report on
“INCOME TAX PALNNING WITH THE RESPECT OF INDIVIDUAL SALARIED
EMPLOYEES” in the
academic year 2019-20.

The information submitted by me is true & original to the best of my knowledge.

Submitted By- DIPALEE KACHARE

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 ACKNOWLEDGEMENT

Written words have an unfortunate tendency to degenerate gratitude into a stilted

formality.Howerver this is the only way to record permanently one’s gratitude.

I take this opportunity to express my thanks to PROF.FARHAT SHAIKH for constant

support and especially her valuable suggestion in helping me to complete the project on
due time. I also thank office staff member of Pillai’s College who were involved in
providing with the information required to make this project.

I also express my thanks to all teaching and non-teaching staff who directly and in-directly
guided me with moral support to complete this project. I would also like to thank the
librarian who helped me towards providing the needed reference books, which has been an
immense value for collection of the information.

Last but not the least I am thankful to my parents and my friends for their encouragement
and co-operation during the time of my work .

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 INDEX
CHAPTER PAGE
CHAPTER NAME
NO. NO.
1 2
Certificate
2 3
Declaration
3 4
Acknowledgement
4 Introduction 6-28
 Meaning of income tax
 Why pays Income tax
 The basic principles Income tax
 Basic of Income tax
 Income Tax Payment
 Income tax Glossary
 Deductions From Taxable Income
 Income tax Slab for the financial year 2018-2019.
5 Review Of Literature 29-32
6 Research methodology 33-42
 Objective of tax planning
 Hypothesis
 Significance of the study
 Limitations
 Sample Design
 Scope of the study
 Needs & Importance of income tax

7 Data analysis & Interpretation 43-55

8 Finding 56-57

9 Conclusion & Suggestion 58-60

10 Annexure 61-64

11 Bibliography 65-67

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 CHAPTER-1.

INTRODUCTION

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 Meaning of income tax:-

Income Tax Act, 1961 governs the taxation of incomes generated within India and of incomes
generated by Indians overseas. This study aims at presenting a lucid yet simple understanding of
taxation structure of an individual‟s income in India for the assessment year 2019-20

The Income Tax is the annual charge levied on the income viz. Salary, wage, commission,
dividend, bonus, etc. of an individual, company or a firm. For each assessment year, the rate of tax
levied on different income levels, as prescribed in the slab, is defined in the Union Budget
(Finance Act).

In India, the income tax is charged annually at the end of each financial year (April – March). It is
the main source of Income for the Government that is essential to maintain the deficits and the
optimum cash flow in the money market. There are different tax rates for different income levels on
the basis of which the tax amount is computed.There is a minimum cap on income beyond which
the tax is calculated.

Income tax refers to annual taxes levied by the federal government and most state governments on
individual and business income. By law, businesses and individuals must file federal and state
income tax returns every year to determine whether they owe taxes. Governments use the taxes they
collect to fund their activities.

Defining Income:-
Income tax is a certain percentage of your income that you have to pay regularly to
the government. Income has been very widely defined in the Income-tax Act. In simple words,
income includes salary, pension, rental income, profits out of any business or profession, any profit
made out of the sale of any specified asset, interest income, dividends, royalty income etc.

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The law classifies income under 5 major heads as already mentioned above.

 Salary Income
 House Property income
 Profits and Gains from Business or Profession
 Capital Gains
 Income from other Sources

The law also allows a taxpayer to claim deductions specific to each such income and hence to avail
the appropriate deductions, it is important that you classify income under the right heads. Eg. A
salaried taxpayer can claim a standard deduction of Rs 40,000 while a taxpayer having rental
income from a flat can claim municipal taxes as a deduction.

Income Tax Act, 1961 is the guiding baseline for all the content in this report and the tax saving tips
provided herein are a result of analysis of options available in current market. Every individual
should know that tax planning in order to avail all the incentives provided by the Government of
India under different statures is legal.

Few Common Deductions are:

 Public Provident Fund (PPF)

 Life insurance premium

 Medic Claim insurance

 Tuition fees for child education

 Contribution to NPS

 Tax Saver Fixed Deposit (FD)

 Health insurance premium

 Investments made under The Rajiv Gandhi Saving Scheme

 Home loan repayment, etc.

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 Who pays Income Tax
According to the Indian Income-tax Act, 1961, the following parties are liable to pay the income
tax, provided their annual income falls into one of the income slabs as prescribed in the Act:

 Individuals Salaried person

 Hindu Undivided Families (HUFs),
 Companies
 Firms
 Association of persons
 Body of individuals
 Local authority
Hence, every individual falling in any of the above-mentioned categories must pay income tax
which is used by the government for the betterment of the society.

Tax planning is an act with in the four corners of the Act and it is not a colorable device to avoid the
tax. Thus, if a person takes the advantage of the deductions and rebates, he not only reduces his tax
liability, but also helps in achieving the objectives of the legislature, which is lawful, social and
ethical. Tax planning involves in every case a thorough and up-to-date knowledge of tax laws. Not
only is an up - to - date knowledge of the statute law necessary, but one must also be aware of the
judge-made laws in the form of various decisions of the Courts. One of the best methods to
study tax planning is through the case law. The judgments of the Supreme Courts and various High
Courts reveal instances of successful and unsuccessful tax planning. The judgments touch up on
various provisions of tax laws and their application to different situations. The question of
interpretation of law can also have a bearing on the success or failure of tax planning. The circulars
issued by the Central Board of Direct Taxes from time to time will be of much use to the tax
payers. Moreover, a sound method of tax planning should be carefully chartered after
considering that whatever is done is not only strictly within the frame work of law but is also in
consonance with the legislative intentions and should sound sensible to any reasonable person.

Tax planning may be defined as an arrangement of one‟s financial affairs in such a way that
without violating in any way the legal provisions, full advantage is taken of all exemptions,
deductions, concessions, rebates, allowances and other reliefs or benefits permitted under the Act
so that the burden of taxation, as far as possible, is the least. Tax planning may, therefore, be

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regarded as a method of intelligent application of expert knowledge while planning one‟s affairs
with a view to securing the consciously provided tax benefits on the basis of national priorities in
keeping with the legislative and judicial opinion. Tax planning is neither tax evasion nor tax
avoidance. It is the scientific planning of one‟s financial affairs in such a way as to attract
minimum liability to tax or postponement of the tax liability for the subsequent period by availing
of various incentives, concessions, allowances, rebates and reliefs provided for, in the context of
existing tax laws.

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 The Basic Principles Income Taxes

To implement that objective, all of the following basic principles are applied:-

While tax rules vary widely, there are certain basic principles common to most income tax
systems. Tax systems in Canada, China, Germany, Singapore, the United Kingdom, and the United
States, among others; follow most of the principles outlined below. Some tax systems, such as
India, may have significant differences from the principles outlined below. Most references below
are examples; see specific articles by jurisdiction .

Taxpayers and rates --- Residents and nonresidents

Defining income --- Deductions allowed

Business profits --- Credits

Alternative taxes --- Administration

State, provincial, and local --- Wages based taxes

Taxes for Salaried Individuals:-

As soon as the filing season begins, salaried class are in a frenzy about taxes they must shell out for
the said financial year. It is important to understand your tax slab and what each of your salary
breakup component means. This can help you figure out how to save on taxes. If you want to
understand your salary components or want to learn how you can save tax on your salary income,
this guide is for you.

1. Basic Salary
This is a fixed component in your paycheck and forms the basis of other portions of your salary,
hence the name. For instance, HRA is defined as a percentage (as per the company‟s discretion) of
this basic salary. Your PF is deducted at 12% of your basic salary. It is usually a large portion of
your total salary.

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2. House Rent Allowance

Salaried individuals, who live in a rented house/apartment, can claim house rent allowance or HRA
to lower tax outgo. This can be partially or completely exempt from taxes. The income tax laws
have prescribed a method for computing the HRA that can be claimed as an exemption. Also do
note that, if you receive HRA and don‟t live on rent your HRA shall be fully taxable.

3. Leave Travel Allowance

Salaried employees can avail exemption for a trip within India under LTA. The exemption is only
for the shortest distance on a trip. This allowance can only be claimed for a trip taken with your
spouse, children, and parents, but not with other relatives. This particular exemption is up to the
actual expenses, therefore unless you actually take the trip and incur these expenses, you cannot
claim it. Submit the bills to your employer to claim this exemption.

4. Bonus

The bonus is usually paid once or twice a year. Bonus, performance incentive, whatever may be its
name, is 100% taxable. Performance bonus is usually linked to your appraisal ratings or your

performance during a period and is based on the company policy .

5. Employee Contribution to Provident Fund (PF)

Provident Fund or PF is a social security initiative by the Government of India. Both employer and
employee contribute a 12% equivalent of the employee‟s basic salary every month toward
employee‟s pension and provident fund. An interest of about 8.55% from FY 2017-18 (earlier it
was 8.65%) gets accrued on it. This is a retirement benefit that companies with over 20 employees
must provide as per the EPF Act, 1952.

6. Standard Deduction

Standard Deduction has been reintroduced in the 2018 budget. This deduction has replaced the
conveyance allowance and medical allowance. The employee can now claim a flat Rs. 40,000
deduction from the total income, thereby reducing the tax outgo.

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7. Professional Tax

Professional tax or tax on employment is a tax levied by a state, just like income tax which is levied
by the central government. The maximum amount of professional tax that can be levied by a state is
Rs 2,500. It is usually deducted by the employer and deposited with the state government. In your
income tax return, professional tax is allowed as a deduction from your salary income.

Basics of Income Tax

1 Income Chargeable to Tax

As per Income Tax Act, 1961, income tax is charged for any assessment year at prevailing rates in
respect of the total income of the previous year of every person. Previous year means the financial
year immediately preceding the assessment year.
Your income is not equal to your salary. You could earn income from several other sources other
than your salary income. Your total income, according to the Income Tax Department, could be
from house property, profit or loss from selling stocks or from interest on a savings account or on
fixed deposits. All these numbers get added up to become your gross income.

Income from Salary All the money you receive while rendering your job as a
result of an employment contract

Income from house property Income from house property you own; property can be
self-occupied or rented out.

Income from other sources Income accrued from fixed deposits and savings
account come under this head.

Income from capital gains Income earned from the sale of a capital asset (mutual
funds or house property).

Income from business and Income/loss arising as a result of carrying on a business

profession or profession. Freelancers income come under this
head.

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2. Tax Rates Add up all your income from the heads listed above. This is your gross total
income. From your gross total income, deductions under Section 80 are allowed to be claimed. The
resulting number is the income on which you have to pay tax. ClearTax‟s app lets you determine
your tax refund or dues for the year. Your tax is calculated as per the slabs mentioned below.
Income Tax Rates for taxpayers under 60 years of age in FY 2018-19, FY 2017-18 and FY
2016-17.

Tax Slab FY 2018-19 & FY 2017-18 Tax Slab FY 2016-17

Tax Rate Tax Rate

Up to Rs 2,50,000 No tax Up to Rs No tax

2,50,000

Rs 2,50,000 – Rs 5,00,000 5% Rs 2,50,000 – 10%

Rs 5,00,000

Rs 5,00,000 – Rs 20% Rs 5,00,000 – 20%

10,00,000 Rs 10,00,000

Rs 10,00,000 and beyond 30% Rs 10,00,000 30%

and beyond

Cess:
For FY 2018-19 – Health and education cess is 4% on the sum of total income tax and surcharge.

For FY 2017-18 and 2016-17 Higher education and secondary cess is 3% on the sum of total
income tax and surcharge.

Exemption for senior citizens (age of 60 years or more but up to 80 years)

 For FY 2018-19 , 2017-18 and 2016-17 is Rs. 3,00,000

Exemption for super senior citizens (age of 80 years or more)

 For FY 2018-19, 2017-18 is Rs. 5,00,000.

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3. TDS on Salary

TDS is tax deducted at source. Your employer deducts a portion of your salary every month and
pays it to the Income Tax Department on your behalf. Based on your total salary for the whole year
and your investments in tax-saving products, your employer determines how much TDS has to be
deducted from your salary each month. For a salaried employee, TDS forms a major portion of an
employee‟s income tax payment. Your employer will provide you with a TDS certificate called
Form 16 typically around June or July showing you how much tax was deducted each month. Your
bank may also deduct tax at source when you earn interest from a fixed deposit. The bank deducts
TDS at 10% on FDs usually. A 20% TDS is deducted when the bank does not have your PAN
information.

4. Form 26AS. Form 16

Form 16 is a TDS certificate. Income Tax Department mandates all employers to deduct TDS on
salary and deposit it with the government. The Form 16 certificate contains details about the salary
you have earned during the year and the TDS amount deducted. It has two parts – Part A with
details about the employer and employee name, address, PAN and TAN details and TDS
deductions. Part B includes details of salary paid, other incomes, deductions allowed, tax payable.

5. Form 26AS

Form 26AS is a summary of taxes deducted on your behalf and taxes paid by you. This is provided
by the Income Tax Department. It shows details of tax deducted on your behalf by deductors,
details on tax deposited by taxpayers and tax refund received in the financial year. This form can be
accessed from the IT Department‟s website.

6. Deductions

The lower your taxable income, the lower taxes you ought to pay. So be sure to claim all the tax
deductions and benefits that apply to you. Section 80C of the Income Tax Act can reduce your gross
income by Rs 1.5 lakhs. There are a bunch of other deductions under Section 80 such as 80D, 80E,
80GG, 80U etc. that reduce your tax liability.

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 Income Tax Payment

The Government collects income tax from three channels:

 TDS
 Advance tax
 Self Assessment tax

1. TDS

 TDS exists to help government get tax throughout the year. There‟s a prescribed table on
how much tax deducted under what circumstances.
 Your employer cuts TDS based on the information available to him about you. So if you‟ve
made investments, but have not declared or if you live in a rented house, but have not shared
rent receipts, your finance department will have no choice but to deduct tax based on only
thing they know – your CTC.
 This is why the investment proofs deadline in your office is super important. Save yourself
some headache and submit your investment proofs on time.
 Banks don‟t know if you‟re working in a company or if income from fixed deposits is what
you solely rely on. So they deduct a standard 10% tax before they give away the interest.
Now if you fall in the 20% or 30% bracket, it‟s on you to pay the remainder of the income
tax. That‟s why sometimes you may find yourself paying some tax at the time of filing a tax
return.
 Make sure banks have your PAN number. They deduct 20% tax if they don‟t have your
PAN in their records.
 Anyone who‟s receiving an income of a specified nature say salary, interest, commission,
rent, professional income etc. will have some percentage of tax withheld as prescribed by
the government.

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2. Advance Tax

Self-employed people must do the calculation themselves and pay the tax to the Government
periodically every quarter.The deadlines are:

Due Date Advance Tax Payable

On or before 15th June 15% of advance tax

On or before 15th September 45% of advance tax

On or before 15th December 75% of advance tax

On or before 15th March 100% of advance tax

To calculate your advance tax:

 Add up all the invoices received and include future payments you will be receiving till
March 31 to estimate your taxable income.
 Deduct expenses directly related to your business, and any investments you have made
under Section 80C in order to arrive at your taxable income.
 Determine your tax liability for the year
 Reduce the Tax already deducted at source from your tax liability as determined above
 If the remaining tax payable is greater than Rs 10,000 you will have to pay advance taxes
based on the rates prescribed in the above table.
 Use the Income Tax Calculator to determine your tax liability.

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3. Self Assessment Tax

When you are filing a tax return and you find out that you need to pay additional tax, you‟d be
paying self assessment tax. Another way to think about this would be.

 if you are paying tax for a financial year after the deadline has ended, you will pay self
assessment tax.
 if you are paying tax for a financial year during the financial year, you will pay advance tax.

 Payment of TDS Advance Tax and Self Assessment Tax:

TDS is deducted by the payer himself and remitted to the government by him. Hence the taxpayer
need not worry about this part of his tax liability. As regards advance tax and self assessment tax,
the same can be discharged online using Challan 280. Read our detailed guide on payment of taxes
online.

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 Income Tax Glossary

Form 26AS

Form 26AS is a tax summary statement that contains all the tax payments you‟ve made yourself
(self-assessment tax/ advance tax) or tax someone deducted (TDS) on your behalf. You‟re going to
need this document when you are doing your income tax e-filing. Form 26AS can be downloaded
from www.incometaxindiaefiling.com

Form 16

If you need to know whether or not your company has given you some tax allowance like your offer
letter says, or want to see how much tax has been deducted throughout the year, or need to see EPF
contributions, wouldn‟t it be easier if you could see them all in one place? That‟s your Form 16.
Form 16 has:

 a summary of all the tax deducted by each quarter

 all the tax benefits and allowances you‟ve availed as a salaried individual
 Section 80C deductions you‟ve claimed through your employer
 and your taxable income after allowances and Section 80C deductions

This is a super important document for all salaried individuals. And having a Form 16 makes e-
filing your income tax return very simple. You can upload your Form 16 and e-file your income tax
return. No income tax login required.

Form 16A

Form 16A is very similar to a Form 16 in that it contains how much tax was deducted over what
income. So how‟s Form 16A different? Form 16A will never be issued by an employer. They‟re
usually given to you by a bank that‟s deducting TDS, or a company that‟s deducted tax on your
freelancing service.

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Investment submission proof deadline

Depending on how large your company is, you might have two deadlines related to investment
proofs. There‟s one in the beginning of the year (April) that needs you to just declare how much
money you‟re planning to invest in Section 80C. This will give an indication on how much they
need to deduct in TDS.Again in the last quarter (roughly between December and February), you
will be asked to submit investment proofs. This is when you need to submit all your rent receipts,
medical bills (if you‟re getting medical reimbursement), investments under Section 80C, 80D.

Assessment Year/ Financial Year

Financial Year runs between April 1 and March 31 of each year. Income tax is calculated for this
period. Income tax returns are assessed the year after the financial year has finished. So that‟s your
Assessment Year. During the assessment year, taxpayers file their income tax return. Income tax
return and refunds are processed by the I-T Department that year.

ITR-V

ITRV stands for Income Tax Return – Verification. After filing your tax return online, you must
print and sign a 1-page document and send it to the Income Tax Department.

Challan 280

Challan 280 is the slip that you will use for online income tax payment. Follow this guide to learn
how to pay tax due. This is the link to the Income Tax Department website. If you are a taxpayer,
you‟re going to need to use for:

 Getting your tax credit statement Form 26AS

 Getting your tax records for home loan or visa application
 Verifying your income tax return after ITR submission

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DEDUCTIONS FROM TAXABLE INCOME:-

Section 80C

Government wishes to encourage some types of expenses and investments. In order to realize this
goal, it has given the advantage of income tax exemption. Subsequently, we have several
investments as well as expenses offered by section 80C, 80CCC and 80CCD. On the other hand, the
total deduction in this section is only up to Rs 1.5 Lakh.

 Employee Provident Fund

 Pension/ Annuity Schemes
 Life insurance premium
 Tax Saving mutual fund (ELSS)
 Home loan principal payment
 Sukanya Samriddhi Account
 Tuition fees for children
 PPF Account Contribution
 National Saving Certificate
 Tax-saving fixed Deposit
 Post office time deposits

Section 80CCG: Rajiv Gandhi Equity Saving Scheme (RGESS)

RGESS scheme entitles the policyholder to save extra tax. To get leverage from this advantage, you
need to be investing your money in the share market for the first time. Moreover, the annual income
needs to be less than Rs 10 Lakh. Therefore, you can invest around Rs 50,000 in this scheme The
income tax exemption is applicable to 50% of the investments you make. Therefore, if the person
invests around Rs 50,000, then the tax deduction will be of Rs 25,000 only.

Section 80D: Medical Insurance Deduction

This scheme is a good opportunity that helps an individual save tax for an income that exceeds 1.5
Lakh. Thus, everyone must use this golden opportunity to save tax. Though the income tax slab has

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not changed, the limit under section 80D was increased. This is described in Section 80D. As per
section 80D, the income tax exemption is applicable for those who have taken a medical insurance
for themselves, family as well as their parents.

Section 80DD: Income Tax Exemption for Maintenance of Disable Dependent

This section offers an additional income tax exemption of about Rs 50,000. Following are the
conditions that you need to fulfil in order to avail the benefits of this section:

1. You must be the guardian of a differently abled individual. That person can be physically or
mentally disabled.

2. You have to give a certificate from an authorized medical practitioner.

3. All the expense arising from the rehabilitation, training treatment, and nursing. Therefore, any
amount deposited under any scheme taken for the differently abled dependent will be entitled to
income tax exemption. Deductions of about Rs 1, 00,000 can be claimed if the dependent is
suffering from any severe disability.

Section 80DDB: Serious Ailment Deduction

This deduction is primarily for those who need to get treatment for serious disease. As per this
section, a person can avail a deduction of Rs 40,000 against their income tax

1. The deduction is applicable to the expenditure made to treat a disease of self or someone
dependent.

2. There is a prescribed list of diseases that are covered.

3. The expense made should be real. Reimbursements of claims get subtracted.

4. Certificate for the illness must be from a government doctor.

5. 80,000 is the deduction limit for senior citizens.

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Section 80E: Deduction on Loan for Higher Studies

1. An education loan can be taken from any financial institution.

2. The tax deduction can be availed for up to 7 years.

3. The advantage of this facility can be utilized only in case of higher education.

4. The benefit can be utilized only for the person or his spouse/children. Even the legal guardian of
the scholar can reap the benefit of income tax exemption.

Section 80G: Deduction for Donations

The donations mentioned in Section 80G are entitled to income tax exemption. The deductions vary
depending on the kind of receiver, which means that it may be 100% or 50% of the donation made.

Section 80GG: Deduction on House Rent

 Rent is less than 10% of salary

 5000 per month, i.e. Maximum Deduction is 60,000.
 25% of the whole income.

There are a few clauses to receive this benefit.

 The employer or his partner or minor child must not possess an accommodation in the city
they are working in.
 House rent allowance (HRA) must not be provided by the employee.
 The employee must not possess any self-occupied residential location in any place.

Section 80TTA: Saving Account Interest Deduction

If the yearly taxable income is less than Rs 10,000, then the interest received on the saving account
is not counted in the taxable income.

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Section 80U: Deduction for Disabled

As per section 80U, anyone suffering from a disability is eligible to get an extra income tax
exemption from their taxable income. In such cases, Rs 50,000 can be deducted from their taxable
income. Moreover, in the case of severe disabilities, the deductions can even be Rs 1, 00,000. To
get the benefits from this deduction, one needs to get a certificate from a doctor who works in a
government hospital.

Income Tax Slab for the Financial Year 2018-2019

1. Income Tax Act, 1961 – The provisions of income tax are contained in the Income Tax Act,
1961 which extends uniformly to the whole of India and has been effective since 1962. The
act contains provisions for determining taxable income, tax liability, procedure for
assessment of penalties, etc.
2. Annual Amendments – Since the Income Tax Act is a revenue law, it requires amendments
whenever the government wants to make changes in it. Under the annual amendment of
existing revenue generation requirements, the Government proposes its finance bill, which
directly decides the threshold limits for various tax rates which are commonly referred to
as Income Tax
3. Income – Income in broad terminology is defined as any receipt in the form of money or
money‟s worth which occurs with a certain regularity or expected regularity from a definite
source.

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Income Tax Slab for the Financial Year 2018-2019
As per the union budget of 2018, below are the various slabs according to which income tax is
assessed in various categories.

Resident Individuals & Non Resident Indians

Income Threshold Tax rate applicable

Up to ₹ 2,50,000 NIL

₹ 2,50,000 to ₹ 5,00,000 5%

₹ 5,00,000 to ₹ 10,00,000 20%

Over ₹ 10,00,000 30%

Additional Components:-

1. Surcharge:In case income is more than ₹ 50 lakhs and less than ₹ 1 crore, the surcharge is
applicable at a rate of 10% of the income tax. For income more than ₹ 1 crore, a surcharge
of 15% is applicable on income tax on the amount exceeding ₹ 1 crore
2. Health and Education Cess: “Education Cess” and “Secondary and Higher Education Cess”
will be replaced by “Health and Education Cess” at the rate of 4%, on the amount of tax
computed, inclusive of surcharge.

Hindu Undivided Families (HUFs)

Income Threshold Tax rate applicable

Up to ₹ 2,50,000 Nil

₹ 2,50,000 to ₹ 5,00,000 5%

₹ 5,00,000 to ₹ 10,00,000 20%

Over ₹ 10,00,000 30%

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Additional Components

1. Surcharge:In case income is more than ₹ 50 lakhs and less than ₹ 1 crore, the surcharge is
applicable at a rate of 10% of the income tax. For income more than ₹ 1 crore, a surcharge
of 15% is applicable on income tax on the amount exceeding ₹ 1 crore
2. Health and Education Cess: “Education Cess” and “Secondary and Higher Education Cess”
will be replaced by “Health and Education Cess” at the rate of 4%, on the amount of tax
computed, inclusive of surcharge.

Associations of Persons, Bodies of Individuals and Other Artificial Judicial

Persons

Income Threshold Tax rate applicable

Up to ₹ 2,50,000 Nil

₹ 2,50,000 to ₹ 5,00,000 5%

₹ 5,00,000 to ₹ 10,00,000 20%

Over ₹ 10,00,000 30%

Additional Components

1. Surcharge: In case income is more than ₹ 50 lakhs and less than ₹ 1 crore, the surcharge is
applicable at a rate of 10% of the income tax. For income more than ₹ 1 crore, a surcharge
of 15% is applicable on income tax on the amount exceeding ₹ 1 crore
2. Education Cess: Extra 2% is applicable on the income tax amount plus applicable surcharge.
3. Secondary& Higher Education Cess:Extra 1% is applicable on the income tax plus
surcharge applicable for all tax payers.

26
Senior Citizens

Income Threshold Tax rate applicable

Up to ₹ 3,00,000 Nil

₹ 3,00,000 to ₹ 5,00,000 5%

₹ 5,00,000 to ₹ 10,00,000 20%

Over ₹ 10,00,000 30%

Additional Components

1. Surcharge: In case income is more than ₹ 50 lakhs and less than ₹ 1 crore, the surcharge is
applicable at a rate of 10% of the income tax. For income more than ₹ 1 crore, a surcharge
of 15% is applicable on income tax on the amount exceeding ₹ 1 crore.
2. Health and Education Cess: “Education Cess” and “Secondary and Higher Education Cess”
will be replaced by “Health and Education Cess” at the rate of 4%, on the amount of tax
computed, inclusive of surcharge.

Super Senior Citizens

Income Threshold Tax rate applicable

Up to ₹ 5,00,000 No tax

₹ 5,00,000 to ₹ 10,00,000 20%

₹ 10,00,000 30%

27
Additional Components

1. Surcharge: In case income is more than ₹ 50 lakhs and less than ₹ 1 crore, the surcharge is
applicable at a rate of 10% of the income tax. For income more than ₹ 1 crore, a surcharge
of 15% is applicable on income tax on the amount exceeding ₹ 1 crore
2. Health and Education Cess: “Education Cess” and “Secondary and Higher Education Cess”
will be replaced by “Health and Education Cess” at the rate of 4%, on the amount of tax
computed, inclusive of surcharge.

28
 CHAPTER-2.
REVIEW OF LITERATURE

29
Taxation Policy has been a widely debated issue all over the world. A large number of studies have
been conducted covering different aspects of income tax structure such as personal income tax,
capital gains taxation, agricultural taxation, efficiency of income tax administration etc. over the
years. In this chapter, the available literature was studied to get an insight into the main objectives
of the study. The review of literature is confined to India only as income tax legal frame work
varies from country to country. Moreover, reports of important committees constituted by
Government of India have also been reviewed. A brief review of relevant studies in this regard is
given below:

Indian Taxation Enquiry Committee (1924) was appointed by Government of India to examine the
burden of taxation on different classes of people, equity of taxation and to suggest alternative
sources of taxation under the chairmanship of Charles Todhunter. The committee recommended the
following measures for improvement in taxation of income:
 Loss sustained in one year should be allowed to carry forward and setoff in the subsequent year.
 The income of married couples should be taxed at the rates applicable to their aggregate income.
 In case private companies are formed just for tax avoidance by with holding dividends, then such
companies should be treated as firm.
 The officer should be authorized to compute liabilities of unregistered firm as if it had been
registered in some particular cases if he thinks it reasonable.

Taxation Enquiry Commission (TEC) (1953-54)

headed by John Matthai was set up to review the tax structure in India. It carried out an in -depth
study of the central taxes and their administration. It recommended widening and deepening the tax
structure both at the Centre and the State level for the purpose of financing development outlay and
reducing large inequalities of income. It also recommended for providing tax incentives for
production and investment and periodic appraisal of same. Further, the commission also
recommended the financing of small research sections in selected research institutions by the
government.

30
Direct Taxes Enquiry Committee (1971):-
was appointed by government of India under the chairmanship of Justice K.N. Wanchoo to
recommend measures for unearthing black money, checking tax evasion and reducing tax arrears.
The committee estimated that unreported income during 1968-69 was Rs. 1400 crore which resulted
in tax evasion amounting to Rs. 470 crore. The committee was of the opinion that high tax rates,
controls and licenses in the economy, donations to political parties, ineffective enforcement of laws
and deterioration in moral standards were the main causes responsible for tax evasion. It was also
observed that tax arrears were a chronic problem with the income tax department. Unrealistic and
over assessment of income, administrative delays, shortage of personnel and lack of coordination
were identified as main causes responsible for tax arrears. The measures suggested for dealing with
above problems by the committee were as follows:
 Reduction in tax rates with maximum marginal rate of 75 per cent.
 Minimisation of controls and licenses.
 Regulation of donations to political parties.
 Creating confidence among small tax payers.
 Introducing extensive system of intelligence.
 Imposition of penalty with reference to tax sought to be evaded instead of income concealed.
 Issuing Permanent Account Numbers to all assesses.
 Compulsory registration for charitable and religious trusts which want to claim exemptions under
Income Tax Act.

Economic Administrative Reforms Commission (1983)

was constituted by Government of India to review income tax law, procedure and organization of
the income tax department in 1981 under the chairmanship of L. K. Jha. Some important
recommendations made by the commission were as follows:
 The employers should be permitted to deduct from the salary payable, tax on the employees
incomes from sources like house property, interest on deposits etc., if the employees made a
specific request to the employer and furnished necessary particulars.
 Levy of penalties for defaults like failure to furnish estimates of advance tax, delay in payment of
tax, delay in filing return of income or payment of self assessment tax should be replaced by
compensatory interest at a deterrent rate.

31
 No tax should be deducted from dividends paid through crossed account payee cheques by listed
companies to non-corporate taxpayers.

Tax Reforms Committee (1991)

was constituted by the government of India under the chairmanship of Raja J. Chelliah to study
structure of direct and indirect tax system following the economic crisis of 1991. The committee
observed that multiplicity of provisions in tax laws made administration burdensome. It also pointed
out that tax concessions provided undue tax benefits to high bracket taxpayers. To broaden the base
the committee recommended the following main measures:
 A simple three tier personal income tax structure, with an entry rate of 20 per cent and a top rate
of 40 per cent should be introduced.
 Corporate tax rate should be reduced to 40 per cent for both widely– held and closely-held
companies.

32
 CHAPTER-3.
RESEARCH METHODOLOGY

33
3.1 Objectives of Tax Planning:-

Tax planning is the analysis of one's financial situation from a tax efficiency point of view so as to
plan one's finances in the most optimized manner.Tax planning allows a taxpayer to make the best
use of the various tax exemptions, deductions and benefits to minimize their tax liability
over a financial year

The study was conducted with the following objectives:

 To review the tax reforms being introduced by the Government in respect of Income Tax
Laws and ascertain its impact on the salaried class. Income-tax on salary should be revised
in such a type so that it causes least expenditure to the government
 To assess the efficiency of the administrative machinery for collection of income tax and
management of taxation matters as per the Income Tax Act
 To understand and evaluate the tax planning measures being adopted by then salaried class
of the state. Salary tax payers face least inconvenience with the proposed reform
 To ascertain the level of awareness of the salaried class on various tax planning measures
available under the Income Tax Act.
 To analyse the impact of tax planning on saving habits and investment pattern of the
assesses belonging to the salaried class.
 The government should not lose this institutionalized source of revenue. Tax calculation
becomes easy and simplified
 The procedure of tax collection should be changed in a way that it saves time, money and
energy both to the government and tax payers.
 The proposed reform should restore the well-claimed characteristics of a good tax system.

34
Hypotheses :-

Based on the problems identified and the objectives set, the following hypotheses were
formulate

H0 - These would be no significant between the individual salaried person with their pattern of
saving that lead to income tax planning .

H1- These would be significant between the individual salaried person with their pattern of
saving that lead to income tax planning .

H0- Income tax paying is not beneficial for our countries economy.

H1- Income tax paying is beneficial for our countries economy.

H0-There would be no significant between the individual salaried person with regard to
repayment of liabilities that lead to tax planning.

H1-There would be significant between the individual salaried person with regard to
repayment of liabilities that lead to tax planning.

H0-There would be no significant between the individual salaried person with regard to their
pattern of investments in financial assets.

H1-There would be significant between the individual salaried person with regard to their
pattern of investments in financial assets.

35
Significance of the study :

 In modem inflation-oriented society, taxes constitute major component of one‟s expenditure

and they take away a big slice of one‟s income. It demands great attention when cost of
living is increasing by leaps and bounds.
 The present study seeks to reveal the current weaknesses of the system and its status in the
society and economy. This would unfold the often - preached rationale on the basis of
statistical tables.
 It will take into account tax payers‟ agony and their demand which will help the government
“user friendly”, tax policy.

 The study will generate qualitative material for the use of the government so as to improve
the system and benefit the tax payers.

Limitations:-

 The implementation of an income tax system is very complex, especially when trying to
regulate the rich and the corporations. So complicated in fact that an entire industry exists to
simply monitor and control the system.
 An income tax that gets progressively more burdensome the more money you make reduces
the incentive to work harder and be productive the higher you move up the ladder. While
income tax disincentives working more and incentivizes working less at the same time, the
Laffer curve portrayed below highlights the trade-off between work and tax revenue.
 Since personal income taxation is a very sensitive matter, people generally were
reluctant to disclose information relating to their savings, investments and tax planning
measures adopted for the period under study. Hence, more time and effort had to put to
collect the data.
 Secondary data for the study was collected mainly from the reports of Comptroller and
Auditor General (Union Taxes), annual reports of All India Income Tax Statistics,
Reserve Bank of India Bulletin and circulars and notifications of Central Board of
Direct Taxes. Often there were discrepancies in the data available from various
sources. The current statistics relating to some of the aspects of direct tax
administration is still lacking.

36
  In spite of the above limitations, all efforts were made to ensure correctness in the data
collection.

Sample design:-

Salaried class income tax assesses working in the city of Navi Mumbai constituted the population
for the study. Purposive sampling method was adopted to select the sample size. The sample for the
study consisted of fifty salaried employees working in the city of Navi Mumbai who were income
tax assesses for the Assessment year 2018-19..
On the basis the sample respondents were classified in to level of income, age group, income tax
paid.

Primary Data:-

Primary data was collected through a structured questionnaire to collect information relating to
saving behavior, investment pattern and tax planning measures adopted by the salaried class income
tax assesses of the state. Assessment Year 2016-2017 was selected as the period of study for
collecting primary data.

Secondary Data:

The study is analytical as well as descriptive in nature. It makes use of both primary data and
secondary data. There are two types of source for collecting secondary data, they are:-

1) Internal sources:-

Internal source of secondary data includes the data generated within the organization. Secondary
data for the study was collected from the report of Comptroller and Auditor General of India(union
Taxes), annual reports of all India Income Tax Statistics, Indian Public Finance Statistic, circulars
and notification of Central Board of Direct taxes and Reserve bank India Bulletin.

37
2) External Sources:-

External sources are the sources outside the organization.

Books, Journals and News Papers

Secondary data pertaining to income tax reforms was collected for a period of 21 years from
Fy1990-91 to 2010-2016. The years was selected because comprehensive reforms of income tax in
India was undertaken along with economics reforms since 1991. Strong efforts from the part of the
Government to reform Income Tax administration was initiated in the year 2000.

 Tools used for analysis

All data were tabulated and analysed with the help of statistical tools. Statistical Package for Social
Sciences(SPSS) was used for the analysis. Percentages, average, ratios, ranking tables, rank
correlation, T-test and chi-square test were used to analyse the data. T-test and chi-sqaure test were
used to test whether there is a significant difference in the responses of the employees in the public
sector and in the private sector. Correlation was used to find out the association in terms of
suggestions for improvement in tax planning measures between employees in the private sector and
in the public sector. Ranking table was used to identify priorities on direct tax reforms and examine
whether employees in the private sector as well as in the public sector had the same priorities.

 Statement of the Problem

The salaried employees constitute a sizable class of taxpayers who contribute to the public
exchequer about 12 percent of the total revenue collection by way of income tax. Their income is
assessed under the head “Salaries”. Tax planning has assumed special importance for the salaried
class of tax payers in view of the mounting pressures of inflation, price hike and their strict
obligations to tax compliance.

It is, therefore, essential for this class of tax payers to know their tax obligations in the right
perspective and the measures of tax planning available to them so that they can make the best use of
their earning by reducing the incidence of tax. Thorough and up-to-date knowledge of the tax laws
is necessary to avail the benefits provided under the provisions of the Act and there by ensuring that

38
the „take home pay‟ is kept at the maximum possible monetary level. However, efforts from the part
of the assesses to plan his saving and investment so as to minimize the tax incidence is not up to the
mark. There are numerous reasons for this ranging from lack of awareness of taxation laws to
complexities in the compliance formalities. The administrative machinery for collection and
enforcement of taxes is often complex in terms of maintenance and operations.

Tax planning is possible through appropriate saving and wise investment decisions. Tax payers
normally turn away of their tax liability only towards the end of the financial years. This leaves
them with little option to invest or save with the available income. The real issue would relation to
having awareness on the numerous provisions that would help in reducing the tax liability. The key
issue is awareness about the income tax provisions as well as awareness about investment
opportunities.

The current study is an effort to evaluate the tax planning measures adopted by the salaried income
tax assesses of the State in the light of tax administration measures being implemented by the
Government.

39
Scope of the study:-

 Income-tax in India is one of the important sources of revenue for the government. But the
major contribution comes from the business class whereas the contribution from Salaried
class is negligible. Salaried class have a fixed income and they hardly have an “opportunity”
to evade tax. Middle-aged salaried people are extremely worried about their future and try to
save as much as possible but it becomes difficult due to changing provisions from year to
year. It seems that the acute problems encountered by the salaried class have received the
scant attention of the government.

 The present study seeks to discuss the various aspects of salary taxation. It will focus on the
historical background of taxation. It will include the basic considerations for tax policy and
structure for taxation for India.

 It will also include the objectives of personal taxation, and characteristics of a good tax
system ; in the process it will reflect on the reform of personal taxation. It will throw light
on the three major considerations in framing an effective tax system.

 The study will embrace the present status of salary taxation in India analysing the available
statistics on it. It will also discuss the issues like discrepancy between salaried class and
business class.

 The study is directed to include the attitudes and opinions of various tax payers ( salaried
assessees only). The survey will focus on the tax awareness, tax behaviour and problems
faced by them.

40
Need and Importance of income tax:-

The Importance Of Tax Planning. Whether your investment objective is to preserve your wealth,
provide an income or generate capital growth, for the most effective results you need to protect
your capital and income from being eroded by taxation.

 It can reduce income and capital gains tax on your savings, investments and pensions. Many
people pay more tax than necessary, such as income tax on bank interest they are not even
withdrawing and capital gains tax when switching between investments.
 The less tax you pay, the more you have to spend or save for your future or to leave to your
heirs.
 You may be able to lower the inheritance tax liability for your heirs.
 Tax planning may also make life easier for your heirs. Many of the investment arrangements
we recommend to our clients allow you to fill in a beneficiary nomination form so your
assets should pass directly to your chosen beneficiaries without the need to go through
probate.
 Advance tax planning is important if you are a British expatriate moving back to the UK.
There may be steps you can take now to make your investments tax efficient when you
return.
 It is fairly easy to get DIY tax planning wrong, especially with the goalposts changing all
the time, and you (or your heirs) may end up with an unexpected tax bill, or worse, facing a
tax investigation. Taking professional advice will give you peace of mind that your tax
planning is correct and legitimate and that you are not leaving your family any tax
headaches.
 Wealth management advice is more important than ever before if you want to protect and
grow your wealth; legitimately mitigate the amount of tax you pay; control when and where
you pay tax and ensure your wealth is distributed on your death according to your wishes
and as tax efficiently as possible.
 You have worked hard to build up your current wealth, much of it accumulated out of post-
tax income. Now do not risk losing any more to tax than you have to. At Blevins Franks we
combine effective tax planning strategies with investment advice to maximise your wealth
preservation opportunities.

41
 The tax rates, scope and reliefs may change. Any statements concerning taxation are based
upon our understanding of current taxation laws and practices which are subject to change.
Tax information has been summarised; an individual must take personalised advice.

42
 CHAPTER-4.

DATA ANALYSIS & INTERPRETATION

43
All the above hypotheses were formulated and the same were tested for employees in either sector
with regard to different groups. The income wise classification of employees was based on the tax
rate schedule applicable to individual income tax assessees for the AY 2018-19. As per the
Finance Act2009, minimum tax rate of 10 per cent was applicable to income slab of up toRs. 3
lakh, income slab of Rs. 3 lakh to Rs.5 lakh attracted tax rate of 20 per cent and income above
Rs.5 lakh was taxed at 30 per cent rate.

Table 4.1

Q. 1 Are you a regular tax payer?

No of respondents Percentage
Yes 37 74%
No 13 26%

Percentage

26%

Yes
74% No

44
Table 4.2

Q. 2 What is your income range?

No of respondents Percentage
>3 lacs 30 60%
3 lacs to 5 lacs 15 30%
< 5 lacs 5 10%

Percentage

10%

60%
>3 lacs
3 lacs to 5 lacs
30%
< 5 lacs

45
Table 4.3

Q. 3 Do you avoid a companies products or services due to unethical tax policies ?

No of respondents Percentage
Yes 45 90%
No 5 10%

Percentage

10%

yes
no
90%

46
Table 4.4

Q.4

Do you plan an investing in any government scheem or bond which considering your
tax payment?

No of respondents Percentage
Yes 42 84%
No 7 16%

percentage

16%

84% yes
no

47
Table 4.5

Q. 5 which type of investment do you prefer ?

No of Percentage
respondents
Long term 25 50%
(Greater than
3yrs)
Medium term 20 40%
(1 to 3yrs)
Short term 5 10%
(less than 1
yr)

Percentage

10% Long term (Greater than

3yrs)
40% 50%
Medium term (1 to 3yrs)

Short term (less than 1

yr)

48
Table 4.6

Q. 6 have you borrowed money for invest from banks etc. ?

No of respondents Percentage
Yes 40 80%
No 10 20%

Percentage

20%

Yes
80% No

49
Table 4.7

Q. 7 Is tax is beneficiary for our country ?

No of respondents Percentage
Yes 47 94%
No 3 6%

Percentage

6%

Yes
94% No

50
Table 4.8

Q . 8 period of services of respondents ?

Period of service private public

frequency percent frequency percent
Below10 yrs 25 50% 29 58%
10-20 years 10 20% 12 24%
20-30 years 8 16% 6 12%
Above 30 yrs 7 14% 3 6%
total 50 100 50 100

private

14%

Below10 yrs
16% 50% 10-20 years
20-30 years
Above 30 yrs
20%

51
 public

6%

12%
Below10 yrs
58% 10-20 years

24% 20-30 years

Above 30 yrs

52
Table 4.9

Q . 9 place of respondent residence ?

Place Frequency Percent Frequency Percent Frequency Percent

Urban 35 70% 37 74% 40 80%
Semi 5 10% 6 12% 5 10%
Rural 10 20% 7 14% 5 10%
Total 50 100 50 100 50 100

Frequency

20%

70% Urban
10% Semi
Rural

Frequency

14%

12% Urban
Semi
74% Rural

53
 Frequency

10%

10%
Urban
Semi
Rural
80%

Table 4.10 What percentage of your monthly salary do you save?

No of respondents Percentage

Less than 20% 18 36%

Between 20% - 35% 20 40%

Between 35% - 50% 7 14%

Over 50% 5 10%

Total 50

54
 10%

14% 36%
less than 20%
between 20%-35%
between 35%-50%
Over 50%

40%

55
CHAPTER-5.

FINDING

56
 As far as the salaried assesses are concerned, it was observed that their saving were up to 30
percent of annual income. There was no variation based on income.
 This implies that assesses are consumption oriented (70 per cent) and that is true even in the
low income groups. This means tax planning measures through investments route alone will
not sufficient.
 Providing an alternate channel which is supportive to present consumption or immediate
consumption is recommended.
 Ensuring liquidity in tax planning would strengthen the tax planning process. Tax planning
essentially depends on provisions in the Finance Act and the Budget. Educating the masses
of the provisions of the same and creating awareness on availing the benefits is
recommended.
 On the bases of this study, the respondents rank various tax saving instruments according
To their priority of saving tax. The most adopted tax saving instrument is life insurance
policy, which got the first rank in this study.
 The second most adopted tax saving instrument is provident fund. Further, the third choice
is Tax saving fixed deposits. After that home /education loans, national saving certificates,
unit linked insurance plans and equity linked saving schemes respectively.
 Tax planning not only reduces the tax liability but also enables to achieve the nation‟s
economic and social goals. Hence, if an assessee takes the advantage of tax planning, he not
only reduces his tax liability but also helps in achieving the objective of the legislature,
which is lawful, social and ethical.
 Tax planning measures are investing funds in tax-free return investments, tax-saving
investments, tax-free maturity investments and No tax deduction at source investments.
 It is needless to say that the investors should be made to understand the features of various
tax saving schemes available with tax concession. Hence, this study is undertaken to provide
suitable tax planning measures to the salaried assessees in order to reduce substantially their
tax liability.

57
 CHAPTER–6.

CONCLUSION & SUGGESTION

58
Conclusion

 At the end of this study, we can say that give the rising standards of Indian individuals and
upward economy of the country, prudent tax planning before hand is must for all the citizens
to make the most of their incomes.
 However, the mix of tax saving instruments, planning horizon would depend on an
individual‟s total taxable income and age in the particular financial year.
 Tax planning has a wider philosophy and is closely associated with what the assesses earns
his propensity to consume. The gap between the same goes on saving and if that saving can
relive one from tax, the tax planning is effective.
 The whole process relates to viewing the Income Tax Act in terms of revenue for the
Government and fair disposable income for the assesses. We want a rationalized, simplified,
operational tax system where an assessed is assessed but not feel exploited.
 The government has tried to achieve all round economic objective by providing incentives
development, balanced regional growth, scientific research and development, capital market
and exemption of agricultural income.
 Certain Rationalization and Simplification Measures have been taken during the study
period such as lowering income tax rates in case of all the assesses, introducing standard
deduction at the rate of 30 per cent of net annual value in case of let out house property,
providing depreciation on intangible assets etc.

59
Suggestions:-

 The present study examines the Taxation of Income in India during post liberalisation period
and policy perspective in this regard. It has analysed the growth of income tax revenue,
performance of Income Tax Department and perception of tax professionals regarding
Income Tax System in India.
 With a view to have a proper understanding of the research topic important studies relating
to personal income tax, capital gains taxation, agricultural taxation, efficiency of income tax
administration etc. conducted in India have been reviewed.
 Tax evasion and corruption are widely prevailing in the Indian tax system, which are the
biggest blocks in the way of proper implementation of law. Thus, there is a need to tackle
tax evasion and corruption for improving tax compliance. Government should reduce
number of taxes, rationalize tax rates, use TDS extensively, simplify tax laws, widen Annual
Information Return network, increase publicity, create awareness among general public
regarding tax morality, minimise discretionary powers available with income tax authorities
and inculcate a sense of integrity among tax officials for achieving this objective. Income
Tax Department should utilise information available under the Annual Information Return
properly for detecting tax evaders
 Mistakes in assessments result in revenue loss to the Government as well as harassment to
the taxpayers. Hence, internal audit should be strengthened to minimise mistakes in
assessments.
 It has been found that the arrear of tax demand increased in case of personal income tax as
well as in case of corporate tax during the study period.
 The Government should fix individual responsibility, accountability of assessing officer in
case of delay in refunds, introduce refund banker scheme at a large scale and rationalise 266
TDS rates. Moreover, Income Tax Department should process refund claims of
comparatively large amount on priority basis for reducing interest burden.

60
CHAPTER-7.
ANNEXURE

61
Name (Tax-payer)

Age:

Occupation :

Address.

Q1 Education qualification

a) Graduation

b) Post Graduation

c) Other

Place of Residence:

a) Rural
b) Urban
c) Semi Urban

Status of Employment (state the designation):

a) Private
b) Public:- State Govt. / Central Govt. /Public Sector/Undertakings.

Are you a regular tax payer?

a) Yes
b) No

What is your income range?

a) Less than 3,00,000/-
b) 3,00,000/- to 5,00,000/-
c) More than 5,00,000/-

62
Do you avoid a companies products or services due to unethical tax policies ?

a) Yes
b) No

Do you plan an investing in any government scheme or bond which considering your
tax payment?

a) Yes
b) No

Which type of investment do you prefer ?

a) Less term (Greater than 3yrs)

b) Medium term(1 to 3yrs)
c) Short term(less than 1yr)

Period of services of respondents ?

a) Below10 yrs
b) 10-20 years
c) 20-30 years
d) Above 3yrs

When do you formulate your tax plan during a financial year ?

a) Beginning of the year

b) End of the Year
c) At any time
d) No Planning at all

What rate of return on invest you expert and get?

a) Less than 20%

b) More than 20%

63
Under which heads of income, your income taxable?

a) Income from salary

b) Income from house property
c) Profits & gains of business profession
d) Capital gains
e) Income from other source.

What percentage of your monthly salary do you save?

a) Less than 20%

b) Between 20% - 35%

c) Between 35% - 50%

d) Over 50%

Do you fully utilize Income Tax benefits, e.g. deductions from salary/income, rebates, etc.?

a) Yes
b) No

64
 CHAPTER-8.

BIBLIOGRAPHY

65
Articles:

1. Article 265 of the Indian Constitution,

2. "Analysis of Tax and Non-tax Revenue Receipts Included in Annex".
3. Article 246 of the India Constitution,
4. Seventh Schedule of the Indian Constitution,
5. Distribution of Powers between Centre, States and Local Governments,
6. "Union Budget 2012: GAAR empowers I-T department to deny tax benefits to
'companies'". Income Tax India..
7. Indian Income Tax Act, 1961,
8. Section 14 of Income Tax Act,
9. "Direct Taxes Code Bill: Government keen on early enactment".

Books:

 T. N. Manoharan (2007), Direct Tax Laws (7th edition), Snowwhite Publications P.Ltd.,
New Delhi.

 Dr. Vinod K. Singhania (2007), Students Guide to Income Tax, Taxman Publications,
New Delhi

 Income Tax Ready Reckoner – A.Y. 2007-08, TaxMann Publications, New Delhi

 Dr. Vinod K. Singhania (2013), Students Guide to Income Tax, Taxman Publications, New
Delhi

 Income Tax Ready Reckoner – A.Y. 2014-15,TaxMann Publications, New Delhi

 Ainapure & Ainapure – Direct & Indirect Taxes A.Y. 2014-15, MananPrakashan

 Nabi‟s Income Tax Guidelines & Mini Ready Reckoner A.Y. 2013-14 & 2014-15 , A Nabhi
Publication

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Websites:

 http://in.taxes.yahoo.com/taxcentre/ninstax.html

 http://in.biz.yahoo.com/taxcentre/section80.html

 http://www.bajajcapital.com/financial-planning/tax-planning

 www.Incometaxindia.gov.in

 www.taxguru.in

 www.moneycontrol.com

 www.google.com

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