1.

1 Introduction To The Industry

Organization is working as Chartered Accountant’s firm under the rules and regulations and code
of ethics designed for CA firms by ICAI (The Institute of Chartered Accountants of India).

The Institute of Chartered Accountants of India (ICAI) is a statutory body established by an Act
of Parliament, viz. The Chartered Accountants Act, 1949 (Act No.XXXVIII of 1949) for
regulating the profession of Chartered Accountancy in the country. The Institute, functions under
the administrative control of the Ministry of Corporate Affairs, Government of India. The ICAI
is the second largest professional body of Chartered Accountants in the world, with a strong
tradition of service to the Indian economy in public interest.
The affairs of the ICAI are managed by a Council in accordance with the provisions of the
Chartered Accountants Act, 1949 and the Chartered Accountants Regulations, 1988. The Council
constitutes of 40 members of whom 32 are elected by the Chartered Accountants and remaining
8 are nominated by the Central Government generally representing the Comptroller and Auditor
General of India, Securities and Exchange Board of India, Ministry of Corporate Affairs,
Ministry of Finance and other stakeholders.
Over a period of time the ICAI has achieved recognition as a premier accounting body not only
in the country but also globally, for maintaining highest standards in technical, ethical areas and
for sustaining stringent examination and education standards. Since 1949, the profession has
grown leaps and bounds in terms of members and student base.
 Regulate the profession of Accountancy
 Education and Examination of Chartered Accountancy Course

Page | 1
  Continuing Professional Education of Members
 Conducting Post Qualification Courses
 Formulation of Accounting Standards
 Prescription of Standard Auditing Procedures
 Laying down Ethical Standards
 Monitoring Quality through Peer Review
 Ensuring Standards of performance of Members
 Exercise Disciplinary Jurisdiction
 Financial Reporting Review
 Input on Policy matters to Government

The Chartered Accountancy course is conducted by the Institute of Chartered Accountants of

India, which has its headquarters in New Delhi, 5 regional offices (Calcutta, Kanpur, Chennai,
Mumbai and New Delhi) and 81 branches under these regional centers.

ICAI Profile

Particulars No.
ORGANIZATIONAL

Regional Offices 5
Branches 163
Chapters Abroad 30
MEMBERSHIP (‘000) 265
STUDENTS (‘000) 821

MISSION & VISION

 Mission of ICAI 2030

ICAI will leverage technology and infrastructure and partner with its stakeholders to:

Page | 2
  Impart world class education, training and professional development opportunities to
create global professionals.
 Develop an independent and transparent regulatory mechanism that keeps pace with
the changing times.
 Ensure adherence to highest ethical standards.
 Conduct cutting edge research and development in the areas of accounting, assurance,
taxation, finance and advisory services.
 Establish ICAI members and firms as Indian multi-national service providers.

 Vision of ICAI 2030

ICAI aims at harnessing the opportunities and addressing the challenges presented by the
rapidly changing environment so that, by 2030, ICAI becomes world’s leading
accounting body, a regulator and developer of trusted and independent professionals with
world class competencies in accounting, assurance, taxation, finance and business
advisory services.
ICAI Vision 2030 emphasizes four elements:

 To be World’s leading accounting body:

ICAI envisions becoming the world’s leading accounting body by playing a predominant
role in setting world class standards in identified service areas developing thought
leadership and research that addresses concerns of countries, developed, developing and
under-developed.

 A regulator and developer of Trusted and Independent Professionals:

ICAI will lay further thrust on its regulatory and developmental role that sets the highest
standards of professional and ethical conduct of its members as a core value. Each and
every member of ICAI will not only have the obligation to maintain exacting standards of
clarity, transparency and disclosure and present an independent, informed and balanced
opinion but ICAI will make examples of delinquent members to ensure this core value is
embedded in the DNA of its members.

Page | 3
 With World Class Competencies:

ICAI will ensure that members have the right skills to serve global markets which are
regularly updated and are relevant in the changing economic order. ICAI will provide
holistic education, effective practical training and continuous professional development
to ensure that the knowledge base of the profession keeps pace with emerging global
practices and innovations.

 In accounting, assurance, taxation, finance and business advisory services:

ICAI will strengthen facilities available for providing education, training and continuous
updation of knowledge as also research and development relevant in current times to
establish thought leadership in these areas where members of ICAI have been providing
services.

The six strategic priorities and Action Plan in line with Vision 2030 are:
 Create enabling framework for and facilitate Indian firms and professionals to leverage
global opportunities.
 Leverage national leadership position to assume leadership in regional and international
accounting fraternity.
 Revitalize education and training systems and establish an enabling ecosystem to produce
globally competitive accounting professionals.
 Adapt regulatory mechanism to changing times
 Undertake branding and awareness campaign to enhance public perception of ICAI and
professionals affiliated to ICAI
 Strengthen organizational infrastructure and technological capabilities to improve
engagement with all stakeholders.

Page | 4
Top 11 CA firms in India
1. Deloitte –

Deloitte, in terms of Revenue, is the largest professional services network in the world. Also on
the basis of a number of professionals, it is the largest professional services network in the world.

Deloitte is known for providing audit, tax, consulting, enterprise risk and financial advisory
services to more than 200,000 professionals in over 150 countries. They are the Advisors to
many of the World’s most admired Brands.

The Consulting services of industries work on the theory of ‘Providing practical perspectives and
solutions to queries.’

Deloitte believes in ‘Good to make it great!’ They believe in ‘helping clients to become
Leaders’.

2. PWC –

Price Waterhouse Coopers has been the world’s second-largest professional services network in
terms of Revenue as surveyed in 2014 and is one of the Big Four Auditors and stands neck to
neck with Deloitte, EY and KPMG. It has been a multinational professional services network.

The Firm believes in helping resolve complex issues and identifying opportunities. People from

Page | 5
all backgrounds such as arts, business, economics, engineering, finance, health, information
technology, law and more are entertained.

Try to Make a User-Friendly CA website

3. KPMG –

Having its global headquarters in Amstelveen, Netherlands, KPMG has been considered as one
of the largest professional services companies in the world.

It is amongst the Big Four auditors, standing along with Deloitte and EY. The professionals
employed with this firm, KPMG is 162,000 people and performs three services, viz. audit, tax,
and advisory. The tax and advisory services provided by the firm are further divided into various
service groups.

4. Ernst & Young (known as EY) –

Ernst & Young abbreviated as EY is a multinational professional services firm having its
headquarter in London, United Kingdom. In terms of Revenue, it has been ranked as the world’s
third-largest professional services firm surveyed in 2012 and is one of the four biggest audit
firms.

Page | 6
5. BDO International –

BDO International stands at the fifth rank for providing the largest accountancy network in the
world.

It is a worldwide professional services network and one of the best public accountancy firms. It
has its competency is in serving national and international clients.

Following a survey conducted in 2014, September, BDO has its Member Firms in 151 countries
and takes pride in employing around 60,000 Partners and staff in 1,328 offices throughout the
world.

6. Grant Thornton International –

Grant Thornton is a UK based firm that has its branches in almost 125 countries. This firm is
known for generating very high revenue which is more than 4.5 billion dollars.

It is providing services in assurance, tax and advisory firms. Grant Thornton is also known for
providing services in Assurance and Taxation and other consultancy services relating the
financial matters.

It has been operating for 100 years. Grant Thornton has provided valued service to organizations
with the potential to grow and to operate internationally. It makes the professionals adapt to

Page | 7
market conditions and deal with complex events or transactions.

The member office of Grant Thornton is situated in Connaught Place in New Delhi.

7. RSM International –

RSM ranks the 7th largest among the professional services network for audit, tax and advisory
firms. It takes pride in holding the 6th rank as the largest global provider of tax services in the
world.

It has its fully independent member firms and correspondents in 111 countries surveyed,
September 2014. The member firms of RSM International have a combined total of 35,396 staff
which includes 3,221 partners in 718 offices.

Three of the original member firms of the organization are Robson Rhodes (UK), Salustro
Reydel (France) and RSM McGladrey/McGladrey & Pullen (USA).

8. SS Kothari Mehta & Co. –

The best thing about this Firm is that it has over 55 years in existence. SS Kothari has been one
of the highly reputed firms in Delhi and has its branches in 100 other countries.

Page | 8
It has created a strong National presence through a network creation of 6 offices and 20
associates which covers almost all the regions of the Country. With a combination of Partners
and Associates, it has covered almost all the parts of the country.

It offers services in BPO, Tax Advisory Services, Merger and Acquisition, Statutory Audit
Services, Corporate Laws and other different areas.

9. Lodha & Co. –

This is also a vintage firm set up in 1941 and has its offices all over India. They operate in
locations like Kolkata (Calcutta), Chennai (Madras), Hyderabad, Mumbai (Bombay), New Delhi
and Jaipur.

Lodha & Co. has proficiency in providing professional services to a large number of corporate
clients, central banks, banks, insurance companies, public sector corporations etc. They operate
both in India and Internationally.

10. Sahni Natrajan & Bahl (SNB) –

SNB is a national Indian firm which is based in Delhi and provides its services in the field of
audit, consulting, accounting and allied areas. It was established in 1981 and is one of the leading
Firms in India. Having its Headquarters in New Delhi and branch offices in Bangalore and
Mumbai.

Page | 9
The Firm has kept its Aim for providing services of the highest quality, resulting in the addition
of value to each of its clients in a totally professional, independent and ethical manner.

It is known for providing services in various areas like Taxation, Auditing and Internal Audit,
Corporate Laws and several other services relating to services.

Simple & Easy – Represent your business Online

11. Luthra & Luthra –

Luthra & Luthra is a Delhi-based firm having Six other partners. The Firm was established in
1979.

It has been one of the most leading firms in India and has been providing its services in audit,
advisory, tax and corporate law matters. It is bound to provide high-end services to its clients.

The success of Firms depends on its professionals, thus the Firm focuses on training its
employees such that they could find solutions to the various needs and queries of its clients and
thus, achieving the Organizational goals. It has its branches in Delhi, Mumbai, Bangalore,
Chennai and Noida.

This firm is known for providing its service in different fields like Taxation, Corporate Laws,
Foreign Exchange Compliance and SEBI related services in cooperation with 18 highly qualified
personnel.

Page | 10
 1.2 Introduction To The Company

Subhash Singla & Co. is a leading chartered accountancy firm rendering comprehensive
professional services which include Audit, Management Consultancy, Tax Consultancy,
Accounting Services, Manpower Management, Secretarial Services etc. Established in the year
2000, Subhash Singla & Co. Chartered Accountants in Panipat City, is a player in the category of
CA Services in the Panipat. Their establishment acts as a one-stop destination servicing
customers both local and from other parts of Panipat.
Over the course of their journey, they have established a firm foothold in the industry. The belief
that customer satisfaction is as important as services, have helped their establishment garner a
vast base of customers, which continues to grow by the day. This business employs individuals
that are dedicated towards their respective roles and put in a lot of effort to achieve the common
vision and larger goals of the company.
In the near future, this business aims to expand its line of services and cater to a larger client
base. In Panipat, our establishment occupies a prominent location in Panipat City. It is an
effortless task in commuting to this establishment. It is known to provide top service in the
following categories: CA, GST Registration Consultants, Company Registration Consultants,
Loan Consultants, Digital Signature Services, Import Export Consultants.

Subhash Singla & Co.

CHARTERED ACCOUNTANTS

Mission
Subhash Singla & Co. exists to provide complete, reliable and high quality auditing and
consulting services to individuals and institutions, be it manufacturing, trading, tourism,

Page | 11
financial, governmental, non- governmental, medical, hotels, and any other sectors.
It will provide businesses, entrepreneurs and individuals with the highest quality accounting,
auditing, tax planning and business advisory services delivered in a timely, efficient and
innovative manner by a professional team that clearly enjoys working together to exceed their
clients’ needs and expectations.
The organisation will provide intelligent, dynamic and practical advice to our clients, to help
them to attain their full potential, improve the profitability of their business and to meet the
challenges of the business and economic world. It will aim to add value to the community and
predominantly work with organisations in the charitable and voluntary sectors as partners to help
them achieve their desired outcomes.

Vision
The firm's vision is to be the premier auditing, accounting, tax and business consulting firm by
every measure that matters. The firm would strive to be the most highly respected professional
firm where we seek to build strong and lasting relationships with our clients by providing them
quality services which are personalized, reliable and value driven.
It will be a place where clients will be confident that their interests and business are being cared
for by a trusted firm that enjoys working with them and one another. A firm that will offer
comprehensive business and tax related services and assist enterprises to tackle complex
situations in the fast changing scenarios of business with the power of rightful decision making.

Values
The values of the organization are as follows:
 Valuing People

We believe that our success depends first and foremost on people. By respecting people in
everything we do, we will develop and maintain high quality, mutually beneficial
relationships with our clients, professional colleagues, referral sources, vendors, community
members and each other.
 Building Client Relationships

We seek to earn long-term client loyalty by developing a deep understanding of each client's

Page | 12
 business and personal goals, by demonstrating unwavering reliability and integrity in our
work and by acting as an independent and objective advisor to our clients.

 Upholding Quality and Integrity

We will maintain an environment where a commitment to quality, honesty, respect, fairness

and professional ethics governs the actions and decisions of everyone within our firm.

Major markets and customers:

The market for Subhash Singla & Co. is not limited to some particular type of business or any
particular sector. Rather the businesses, enterprises and institutions whether small, medium or
big related to any sector (Education, Financial Institutions, Trading, Hydro-power, Hospitals,
Hotels, NGOs, INGOs, Business Enterprises, Manufacturing, etc) whether located inside or
outside the Panipat district are the major markets for the various services provided by the
organization.
The firm has provided consulting and auditing services to various organizations in Panipat and
Jind district ranging commission agents, textile manufacturers & traders, manfactures of
products like bricks, chemicals and many more. Firm has also involved in advisory works,
auditing and as a counterpart with local consultancy and also in the capacity of independent
expert for agencies like Shyam Overseas, Gupta Armoury, Singla Brothers, Gupta Textiles,
Reliwell Pharma, N.B. Sales Corporation, etc.

Products and services

The major products and services provided by the firm are auditing, due diligence, account
outsourcing, project management and consulting services which are as follows:

Audit
Auditing is a systematic process of objectively obtaining and evaluating evidence regarding
assertions about economic actions and events to ascertain the degree of correspondence between
those assertions and established criteria and communicating the results to interested users.
Audit involves the following:

Page | 13
  In depth study of existing systems, procedures and controls for proper understanding.
Suggestions for improvement and strengthening.

 Ensuring compliance with policies, procedures and statutes.

 Comprehensive review to ensure that the accounts are prepared in accordance with
Generally Accepted Accounting Policies (GAAP) and applicable Accounting
Standards/IFRS.

 Checking the genuineness of the expenses booked in accounts.

 Reporting inefficiencies at any operational level.

 Detection and prevention of leakages of income and suggesting corrective measures to

prevent recurrence.

 Certification of the books of account being in agreement with the Balance Sheet and
Profit and Loss Account.

 Issue of Audit Reports under various laws.

The various types of auditing services provided by the organization are Statutory Audit, Due
Diligence Audit, Internal Audit, External Audit, Financial Audit, Forensic Audit etc. The most
common types of audit are briefly explained below:
 Financial Audit:

In a financial audit, the assertions about which the auditor seeks objective evidence relate to the
reliability and integrity of financial and, occasionally, operating information. This type of audit
usually covers the basic set of financial statements (Balance Sheet, Income Statement, Statement
of Cash Flows, Statement of Changes in Equity and notes to the financial statements)
 Statutory Audit:

A legally required review of the accuracy of a company's or governments’ financial records is

what termed as Statutory Audit. The purpose of a statutory audit is same as the purpose of any
other audit - to determine whether an organization is providing a fair and accurate representation
of its financial position by examining information such as bank balances, bookkeeping records

Page | 14
and financial transactions.
 Compliance Audit:

A compliance audit determines the extent to which rules, policies, laws covenants, or
governmental regulations are followed by the entity being audited. For example examination of
tax returns of individuals and companies by the Internal Revenue Department for compliance
with the tax laws
 Internal Audit:

Internal audit is an independent, objective assurance and consulting activity designed to add
value and improve an organization's governance, risk management and management controls
over efficiency/effectiveness of operations (including safeguarding of assets), the reliability of
financial and management reporting, and compliance with laws and regulations.

Account Outsourcing:
Outsourcing is gaining popularity as a way to reduce financial and operational risks by making
them easier to manage. Keeping this in mind, the firm provides accounting services to various
organizations. Business organizations can alleviate the burden of staying on top of frequent
changes to tax codes and accounting regulations and provide increased levels of information
transparency, visibility of controls and clarity of accountability by outsourcing of accounting
system.
Tax Management:
Enhancing a stakeholder value is a fundamental concept, which drives every management effort
in the modern business environment. Progressive and bottom line focused managements have
realized that taxes should be viewed as a dynamic item of cost, rather than a passive change on
the profits. Indeed an effective tax cost management provides a distinct competitive advantage,
which requires the application of appropriate tax strategies, proactively identified and
meticulously implemented.
In the modern day world all businesses are engaged in multinational transactions and operations,
they are continually challenged to manage the impact of multiple and ever-changing tax-
jurisprudence. The firm helps in tax management for organizations. Organizations can acquire

Page | 15
services like calculation of income tax, management of Value Added Tax (VAT), Tax Deducted
at Source, timely filing and payment of tax to Inland Revenue Department, Goods & Services
Tax (GST), Representation & Litigation support services etc.

Consultancy and Training:

The firm also offers advising and counseling services on matters relating to accounting system,
tax procedures, company establishment, and numerous other financial matters. The firm provides
consultancy services in areas of Country Strategic Papers, Restructuring policies and Internal
Control System Development, Mergers/Demergers, Financial Controller/ Due Diligence
Review/Special Review of various Infrastructure projects on behalf of commercial banks;
Forensic Audits, etc.
GST Return Filing and GST Audit:

GST has been introduced in India completely in digital form registering for GST and filing of
returns, paying tax liability etc., everything has been completely introduced in online digital
platform which has become the big task for Traders to automate themselves to use the digital
form of filing returns and paying tax. As it is compulsory that GST returns filing has to be done
online, many of the Traders depend upon consultants, auditors and third parties for such filing
services. Under GST, a registered dealer has to file GST Returns that include purchases, sales,
Output GST (on sales) and Input Tax Credit (GST paid on purchases).

Chartered accountant offer services in Filing of GST Return monthly, quarterly and annually.
The details of the returns required to be filed by the assessee under the GST regime are as below:
GSTR – 1: Return for Outward Supplies
GSTR – 2: Return for Inward Supplies
GSTR – 2A: Read Only Document
GSTR – 3B: Summary of Inward and Outward Supplies
GSTR – 4: Return For Composition Dealers,
GSTR – 5: Return For Non-Resident Taxable Persons,
GSTR – 6: Return For Input Service Distributors,
GSTR – 7: Return For Taxpayers Deducting TDS,
GSTR – 8: Return For E-Commerce Operators Collecting TCS,

Page | 16
GSTR – 9: Annual Return For Normal Registered Taxpayer Under GST,
GSTR – 9A: Annual Return For Composition Dealers,
GSTR – 9B: Annual Return For E-Commerce Operators Collecting TCS,
GSTR – 9C: Return For Registered Persons Getting Accounts Audited From CA,
GSTR – 10: Return For Registered Person Whose GST Registration Gets Cancelled,
GSTR – 11: Return For UIN (Unique Identification Number) Holders.

Turnover based Audit performed by Chartered Accountant or Cost Accountant, if the Turnover
exceeds Rs.2 crores. GST Audit will apply every year for those GST registered business having
turnover more than Rs 2 crores, by the sale of goods or services in the financial year.

Audit under GST involves examination of records, returns and other documents. It also ensures
correctness of turnover declared, taxes paid, refund claimed, input tax credit availed and assess
other such compliances under GST Act.

Page | 17
 1.3 Introduction To Topic

Income tax deductions help people bring down their tax liability in a financial year. In other
words, investments done in a financial year that are offset against gross annual income while
filing your ITR are known as IT deductions. The provision of tax deductions was done to
inculcate a habit of saving in people and assist them in constructing a stable monetary future.
Some popular examples of income tax deductions are Public Provident Fund (PPF), National
Pension Scheme (NPS), investments made under Section 80 of the IT Act, 1961, in ELSS funds,
principal repayment of home loan, etc.

Public Provident Fund (PPF)

The Public Provident Fund (PPF) scheme is a very popular long-term savings scheme in India
because of its combination of tax savings, returns, and safety. The PPF scheme was launched in
1968 by the Finance Ministry's National Savings Institute. The main objective of the scheme is
to help individuals make small savings and provide returns on the savings. The interest is paid on
March 31 and the PPF interest rate is set by the Finance Ministry on a yearly basis. The
calculation of interest is based on the minimum balance that is available between the close of the
fifth day and the last day of the month.

PPF Information
Tenure 15 years (Can be renewed in blocks of 5 years)

Interest rate 7.1% (compounded on an annual basis)

Investment Amount Minimum Rs.500, Maximum Rs.1.5 lakh p.a.

Maturity Amount Depends on the investment tenure

Features of PPF account

The main features of the PPF account are mentioned below:

Page | 18
  Investment Limits: For a PPF, you should have a minimum investment of Rs.500 and
your maximum investment is Rs.1.5 lakh for every financial year.

 Tenure of the PPF: The minimum tenure of a PPF is 15 years. This can be extended in
sets of 5 years.

 Deposit Frequency: Your deposits into the PPF account have to be made once every
year for tenure of 15 years.

 Opening Balance: You can open a PPF account with Rs.100 and annual investments
over Rs.1.5 lakh will not earn any interest.

 Nomination: As a PPF account holder, you can have a nominee for your account when
you open the account or after.

 Mode of deposit: You can make a deposit into the PPF account via cheque, cash,
demand draft, or online fund transfer.

 Risk factor: The PPF is backed by the Indian government, and so, it is risk-free and
offers guaranteed returns.

 Joint accounts: You can hold a PPF account in only one individual's name.

Tax Benefits in Public Provident Fund

 Public Provident Fund is an investment which comes under the Exempt-Exempt-Exempt

(EEE) category.

 This means that the deposits that you make in the Public Provident Fund will be
deductible (Section 80C of the Income Tax Act).

 The amount that you accumulate and the interest will be exempt from tax when you
withdraw the money.

 You should note that you cannot close a Public Provident Fund account before maturity.

Page | 19
Employee Provident Fund

EPF is the main scheme under the Employees' Provident Funds and Miscellaneous Act, 1952.
Currently, the rate of interest on EPF deposits is 8.10% p.a. It is mandatory for the employee and
the employer to make a EPF contribution. Each makes a 12% contribution of the employees'
dearness allowance and basic salary towards EPF. Given below are the details of the employees'
and employers' contribution towards EPF.
 Employee's contribution towards EPF - 12% of the employee's salary is deducted by
the employer on a monthly basis for contribution towards EPF. The entire contribution
goes towards the EPF account.

 Employer's contribution towards EPF - The employer also contributes 12% of the
employee's salary towards EPF.

EPF Benefits

Given below are the benefits of the EPF scheme:

 It helps in saving money for the long run.

 There is no requirement to make a single, lump-sum investment. Deductions are made on

a monthly basis from the employee's salary and it helps in saving a huge amount of
money over a long period.

 It can help an employee financially during an emergency.

 It helps in saving money at the time of retirement and helps an individual maintain a good
lifestyle.

EPF Interest Rate

Currently, PF interest rate is 8.10%. It is possible to easily calculate the interest amount
accumulated in the EPF account at the end of a financial year. This amount is added to the
employer and employee contributions at the end of the year to find the total balance in the
account.

Page | 20
EPF Eligibility

The eligibility criteria in order to join the EPF scheme are mentioned below:
 It is mandatory for salaried employees with an income of less than Rs.15,000 per month
to register for an EPF account.

 As per law, it is mandatory for organisations to register for the EPF scheme if they have
more than 20 employees working for them.

 Organisations with less than 20 employees can also join the EPF scheme on a voluntary
basis.

 Employees who earn more than Rs.15,000 can also register for an EPF account; however,
they must get approval from the Assistant PF Commissioner.

 The whole of India (except the states of Jammu and Kashmir) can benefit from the
provisions in the EPF scheme.

NSC - National Savings Certificate

A fixed income scheme that can be opened at a post office is the National Savings Certificate.
The scheme is a low-risk product and is secure.
Tenure 5 years

Rate of Interest 6.8% p.a.

Minimum Amount Rs.1,000

The NSC scheme is available at all NSC post offices and the Indian Government promotes the
NSC scheme. Due to the number of post offices present in India and the easy access to these post
offices, the scheme has become very popular in India. The main aim of the scheme is for
individuals to make small or medium savings, and tax benefits are provided for these savings.

Page | 21
Since the scheme is encouraged by the Indian Government, the risks of investing in the scheme
are low.
The scheme was launched mainly for individuals, therefore, non-resident Indians (NRIs) and
Hindu Undivided Families (HUF) are not eligible to opt for this scheme. Only Indian citizens
will be able to invest in the NSC scheme.
NSC Features
The main features of the scheme are mentioned below:
 Minimum investments: The minimum amount that a certificate can be purchased for is
Rs.100. The different denominations that the certificate can be purchased for are
Rs.10,000, Rs.5,000, Rs.1,000, Rs.500, and Rs.100. Initially, small investments can be
made, and individuals can increase investments when feasible.

 Maturity tenure: 5 years and 10 years are the two maturity periods of the scheme that
individuals can choose from.

 Rate of interest: Currently, the rate of interest has been reduced from 7.9% to 6.8%. and
it is compounded on an annual basis. However, the interest is payable only at maturity.
For example, investment of Rs.100 will get the subscriber Rs.146.93 after 5 years of
investment.

 Nominations: Family members including minors can be added as nominees by the

investor. In case the investor passes away during the tenure of the scheme, the nominee
will be able to inherit the scheme.

 Different types of NSC: Initially, the NSC IX Issue and the NSC VIII Issue were the
two types of certificates available. However, as of December 2015, the Government of
India stopped the NSC IX Issue. Therefore, only the NSC VIII Issue is available.

 Loans against NSC: The NSC can be used as a security or collateral and can be provided
to banks to avail loans. However, the respective post master must authorise the transfer of
the certificate to the bank.

 Purchase of NSC: Upon submitting the required documents, the scheme can be
purchased at post offices.

Page | 22
  Transfer of certificate: Transfer of NSC is possible from one post office to another.
Transfer of certificate from one individual to another is also possible. However, the
certificate will remain the same and the name of the new owner shall be written on the
certificate and the name of the old owner will be rounded.

Tax benefits provided by the NSC

Given below are the NSC tax benefits that individuals can avail by investing in the NSC:
 Under Section 80C of the Income Tax Act, 1961, tax benefits of up to Rs.1.5 lakh can be
availed by investing towards the NSC.

 The interest that is generated on a yearly basis by investing in the NSC is considered as a
new investment for tax benefits.

 Tax Deducted at Source (TDS) is not applicable under the National Savings Certificate.
However, as per the marginal income tax rates, the tax must be paid for the interest that is
earned.

Sukanya Samriddhi Yojana

The Sukanya Samriddhi Yojana scheme is aimed at betterment of girl child in the country.
Sukanya Samriddhi scheme has been launched to offer a means of saving to the girl child in
every family. Tenure of SSY is 21 years from the date of opening of the account or till the
marriage of the girl after she attains the age of 18 years
Sukanya Samriddhi Yojana Information
Interest rate 7.60% p.a.

Investment Amount Minimum - Rs.250, Maximum Rs.1.5 lakh p.a.

Maturity Amount Depends on the invested amount

Maturity Period 21 years

Page | 23
Sukanya Samriddhi Yojana (SSY) scheme was launched by Prime Minister Narendra Modi
under the Beti Bachao Beti Padhao campaign with the main aim of securing the future of a girl
child. Investments made towards the scheme can be used for the girl child's marriage and
education.
Sukanya Samriddhi Yojana Interest Rate

Currently, the interest rate of SSY scheme was reduced from 8.4% to 7.6% and it is compounded
on a yearly basis. Interest is not payable once the duration of the scheme is completed or if the
girl becomes a Non-resident Indian (NRI) or a non-citizen. The rate of interest is decided by the
government and is determined on a quarterly basis.

Features of Sukanya Samriddhi Yojana

The main features of the SSY account are mentioned in the table below:
Features Details

Operation of  The guardian or parents can operate the account until the girl reaches
the account the age of 10 years.

 The girl must operate the account once she attains the age of 18 years.

Deposits made The minimum and maximum deposit that can be made in an account in a
towards the financial year is Rs.500 and Rs.1.5 lakh, respectively. The deposits can be
account made in multiples of 100.

Duration of the Deposits towards the scheme should be made for a period of 15 years.
scheme However, the scheme matures after 21 years.

Transfer of An SSY account can be transferred from post offices to banks and vice versa
account anywhere within India. No charges will be levied for the transfer of the
account. However, a proof for change in residence must be produced. In case
no proof is produced, a Rs.100 charge will be levied.

Page | 24
Mode of Deposits towards the account can be made in the form of online transfer,
deposits demand draft, cheque, or cash.

Sukanya Samriddhi Yojana Tax benefits

Given below are the Sukanya Samriddhi Yojana tax benefits:
 Under Section 80C of the Income Tax Act, 1961, tax benefits of up to Rs.1.5 lakh are
provided for contributions made towards the scheme.

 The interest amount that is generated is also exempt from tax.

 Tax benefits are also provided for the maturity amount or the withdrawal amount.

Sukanya Samriddhi Yojana Eligibility

The Sukanya Samriddhi Yojana account eligibility are mentioned below:
 The parent or legal guardian can open an SSY account on behalf of a girl child until she
reaches the age of 10.

 The girl child must be a resident Indian.

 In a family, up to two accounts can be opened for two girls.

 A third SSY account can be opened in case of twin girls.

Equity Linked Saving Scheme (ELSS)

An ELSS fund or an equity-linked savings scheme is the only kind of mutual funds eligible for
tax deductions under the provisions of Section 80C of the Income Tax Act, 1961. You can claim
a tax rebate of up to Rs 1,50,000 and save up to Rs 46,800 a year in taxes by investing in ELSS
funds.
ELSS mutual funds’ asset allocation is mostly (65% of the portfolio) made towards equity and
equity-linked securities such as listed shares. They may have some exposure to fixed-income
securities as well. These funds come with a lock-in period of just three years, the shortest among

Page | 25
all Section 80C investments.

Features of ELSS funds

The following are the main features of ELSS mutual funds:
 They offer tax deductions of up to Rs 1,50,000 a year under Section 80C provision

 ELSS funds come with a lock-in period of three years, and there are no provisions to
make a premature exit

 You can invest any amount in ELSS, there is no upper capping, while the minimum
investable amount varies across fund houses

 ELSS funds are the only tax-saving investment with the potential to offer inflation-
beating returns

 Investing in ELSS funds gives you the twin benefits of tax deductions and wealth
creation

 The portfolio of an ELSS fund mostly consists of equities, while they have some
exposure towards fixed-income securities as well.

Tax benefits offered by ELSS funds

ELSS mutual funds provide tax deductions of up to Rs 1,50,000 a year under the provisions of
Section 80C of the Income Tax Act, 1961. This helps you save up to Rs 46,800 a year in taxes.
However, note that your investments are locked-in for three years from the date of investment.

Investment mode – SIP or Lumpsum

Investing via an SIP is advisable if you are not willing to take higher risk. When you invest
through an SIP, you get the opportunity of investing in a fund across business cycles. This helps
you get the benefit of purchasing the fund units across market cycles. When the markets are
down, you buy more units while you purchase fewer units when the markets are bullish.
Therefore, over time, your price of purchase of fund units gets averaged out and turns out to be

Page | 26
on the lower side. You will benefit from this when the markets rise as you can realise higher
capital gains on redemption. This benefit is not available if you invest a lump sum.

Investing a lump sum is not advisable unless the markets are gripped by a bearish trend, and you
are willing to take higher risk levels and have a longer investment horizon. You miss out on the
opportunity to purchase fund units across business cycles, which requires you to stay invested for
longer than 5-7 years to realise good gains.

Unit Linked Insurance Plan (ULIP)

A Unit Linked Insurance Plan or ULIP is a unique plan which provides you an insurance policy
along with an investment component. A part of your premium payment goes towards life cover,
and the other part is invested in funds as your choice. Different insurance companies offer
different choices of funds.
ULIPs belong to the EEE category, which is generally applicable on long-term investments like
EPF (Employee Provident Fund), PPF (Public Provident Fund), NPS (National Pension Scheme),
etc.
a. The first exemption is upon the investment made in a ULIP. The part of your annual income
invested in these instruments becomes tax-deductible.
b. The second exemption is upon the interest earned on the investment.
c. The third exemption is upon the income or the maturity amount of the investment when
withdrawn.
d. The most important ULIP tax benefits that you can avail every year are deductions under
Section 80C of the Income Tax Act.
ULIPs provide you an opportunity for creating wealth creation goals and to ensure your family’s
future and their goals. The plans are flexible where the choices of different fund options are also
available and you can switch funds as per your investment objectives or market activities.

Key features and Benefits of ULIPs

Page | 27
  Offers insurance plus investment benefits: The main objective of a ULIP plan is to
provide maximum wealth appreciation on your investment by market-linked tools and
returns. These plans also provide wide life coverage benefits to you and your family
throughout the policy term.

 Choose and switch between funds: ULIPs provide an option to switch between the
equity and debt funds anytime during the policy tenure. A fixed number of switches are
allowed within a financial year without paying any extra payment. It is advisable to refer
to the policy brochure and documents to know more about whether your ULIP plan offers
free switches.

 Partial Withdrawals: Initially, all the ULIP plans have a lock-in period of five years.
However, a policyholder can select a fixed number of withdrawals from the accrued fund,
after the completion of the lock-in period. You are not required to pay any additional
charges.

 Redirection of Premiums: While investing in ULIPs, you are allowed to redirect your
future premiums in between the available fund options at any time. You are required to
provide the policy number and mention the type of fund in which you are redirecting
your premiums. You may also specify the % of the premium that is allocated for each
type of fund.

Tax Saving Fixed Deposit

It is a financial provision offered by banks and NBFCs, where you deposit a lump sum of money
for a fixed period or tenure. The tenure for a tax saving fixed deposit is 5 years. It offers a tax
deduction under Section 80C of the Income Tax Act, 1961. It has a lock-in period which means
that you are not allowed to withdraw prematurely. The interest earned on the deposits is taxable.
At the time of maturity of a tax saving FD, the maturity amount is credited to your savings
account associated with the FD.

Page | 28
Key Features of a Tax Saving FD
You can build adequate funds over time by investing in a tax saving FD. It not only offers good
returns but also offers tax benefits. Here are some of the key features of a tax saving FD: -
 Tax Exemption: With a tax saving FD, you can avail of income tax exemption
under Section 80C of the IT Act, 1961. It can be claimed on investment of up to Rs 1.5
lakh

 Lock-in Period: A tax saving fixed deposit has a lock-in period of 5 years. The interest
rates also remain unchanged over the five-year period

 Taxable Interest: The interest earned, as a part of the Tax Saving FD, is taxable and is
deducted at the source.

 No Premature Withdrawals: A regular FD offers loan facilities against deposits.

However, premature withdrawals, overdraft (OD), or loan facilities are not available for a
Tax Saving FD.

 No Auto-Renewal Option: There is no auto-renewal facility for a Tax Saving Fixed

Deposit.

 Flexible Interest Pay-outs: Under a tax saving FD you have the flexibility to receive
interest pay-outs at your convenience. You can opt for monthly or quarterly pay-
outs or choose to reinvest in the principal amount.

 Other Features: Interest rates differ from bank to bank, and rates for Indian citizens,
Hindu Undivided Family (HUF) also vary. A Tax Saving FD can be held in a single or a
joint mode. If it’s a joint Tax Saving Fixed Deposit, tax benefits are available only to the
first account holder.

In regular FDs, you can redeem your savings before the maturity period by paying a penalty,
but tax-saving FDs do not offer this feature. Any Indian resident can open a tax-saving FD
and avail its benefits. The minimum investment limit is Rs. 1,000.

Page | 29
National Pension Scheme (NPS)

The National Pension Scheme is a social security initiative by the Central Government. This
pension programme is open to employees from the public, private and even the unorganised
sectors except those from the armed forces.
The scheme encourages people to invest in a pension account at regular intervals during the
course of their employment. After retirement, the subscribers can take out a certain percentage of
the corpus. As an NPS account holder, you will receive the remaining amount as a monthly
pension post your retirement.
Earlier, the NPS scheme covered only Central Government employees. Central Government
employees joining on or after 01-01- 2004 are mandatorily covered under the NPS. Now,
however, the PFRDA has made it open to all Indian citizens on a voluntary basis.
The NPS scheme holds immense value for anyone who works in the private sector and requires a
regular pension after retirement. The scheme is portable across jobs and locations, with tax
benefits under Section 80C and Section 80CCD.

Features & Benefits of NPS

 Returns/Interest: A portion of the NPS goes to equities (this may not offer guaranteed
returns). However, it offers returns that are much higher than other traditional tax-saving
investments like the PPF.

This scheme has been in effect for over a decade, and so far has delivered 9% to 12%
annualised returns. In NPS, you are also allowed the option to change your fund manager
if you are not happy with the performance of the fund.
 Risk Assessment: Currently, there is a cap in the range of 75% to 50% on equity
exposure for the National Pension Scheme. For government employees, this cap is 50%.
In the range prescribed, the equity portion will reduce by 2.5% each year beginning from
the year in which the investor turns 50 years of age.

However, for an investor of the age 60 years and above, the cap is fixed at 50%. This
stabilizes the risk-return equation in the interest of investors, which means the corpus is
somewhat safe from the equity market volatility. The earning potential of NPS is higher

Page | 30
 as compared to other fixed-income schemes.
 Tax efficiency – NPS tax benefit: There is a deduction of up to Rs.1.5 lakh to be
claimed for NPS for your contribution as well as for the contribution of the
employer. 80CCD(1) covers the self-contribution, which is a part of Section 80C. The
maximum deduction one can claim under 80CCD(1) is 10% of the salary, but no more
than the said limit. For the self-employed taxpayer, this limit is 20% of the gross income.

Section 80CCD(2) covers the employer’s NPS contribution, which will not form a part of
Section 80C. This benefit is not available for self-employed taxpayers.
You can claim any additional self-contribution (up to Rs 50,000) under section
80CCD(1B) as an NPS tax benefit. The scheme, therefore, allows a tax deduction of up to
Rs 2 lakh in total.
 Withdrawal Rules After 60: Contrary to common belief, you cannot withdraw the entire
corpus of the NPS scheme after your retirement. You are compulsorily required to keep
aside at least 40% of the corpus to receive a regular pension from a PFRDA-registered
insurance firm. The remaining 60% is tax-free now. The latest update from the
government says that the entire NPS withdrawal corpus is exempt from tax.
 Early Withdrawal and Exit rules: As a pension scheme, it is important for you to
continue investing until the age of 60. However, if you have been investing for at least
three years, you may withdraw up to 25% for certain purposes. These include children’s
wedding or higher studies, building/buying a house or medical treatment of self/family,
among others. You can make a withdrawal up to three times (with a gap of five years) in
the entire tenure. These restrictions are only imposed on tier I accounts and not on tier II
accounts.

Payments eligible for tax saving deductions under Section 80C

 Payments in LIC – Life Insurance Premium

The annual premium paid for life insurance in the name of the taxpayer or the taxpayer’s
wife and children is an eligible tax-saving payment under Section 80C. The deduction is
valid only if the premium is less than 10% of the sum assured.

Page | 31
 Payments in Children’s tuition fees
The tuition fee paid for the education of two children is eligible for tax deduction under
Section 80C of up to Rs 1.5 lakh. The fee can be paid to any school, college, university or
educational institute situated in India. The fees have to be for a full-time course only. Any
payment towards any development fees or donation or payment of similar nature would not
be allowed as deduction.
 Repayment of Home Loan

The repayment of the principal of a loan taken to buy or construct a residential property is
eligible for tax deductions under Section 80C. This deduction is also applicable on stamp
duty, registration fees and transfer expenses.

 Stamp Duty and Registration Fees Paid for House Property

Stamp duty and registration fees paid for acquisition of house property can also be claimed
as deduction u/s 80C of the IT Act.

Page | 32
 Literature Review

Chitta Ranjan Sarkar (2004), critically studied the income tax exemptions, tax incentives and
bought forth the theory that the main purpose of tax incentives was to motivate the tax payers to
save and invest wisely, more so in the rural and semi urban parts of the country.

Ankita (2009), in her study propounded that a small attempt to rationalize the personal income
tax structure can bring benefits to the government as well as to the people in the form of
(i)increase in the number of assesses (ii) more compliance to the tax laws (iii) high rate of GDP
and (iv) better well being of the individuals.

Nirmala dorasamy (2011), provided an overview of personal income tax administration reforms
as a mechanism to enhance collection of revenue on the one hand and availability of more pool
of fund for welfare of the public on the other. The author found that a comprehensive tax policy
encourage the individual to compliance tax law otherwise they adopt unfair mean to lessen their
tax burden.

Meenakshi Chaturvedi and Shruti Khare (2012) did a study on the savings and investments
choices of Indian households and found that they displayed maximum awareness as regards bank
deposit, real estate, and insurance while shares, securities and mutual funds remained much
unexplored. The researchers also found that age, gender, education and income also had a
bearing on the choice of investment made.

Kaushik Rajiv (2012), In his article “Assessment of Individual Income Tax, Tax Planning and
Saving in India, suggested that any individual who want to assess his/her income tax and want to
do tax planning and savings, first he/she has to calculate his/her total income then compute the
income tax by deduction and adjustment in total income as per tax table structure. If tax is paid
in access then get refund from the income tax department. Finally do the tax audit.

Savita (2013) studied the options for investments for tax savings; the object of the study was to
find the most popular form of investment for tax savings. It was observed that investment by way
of premium paid for life insurance policy, followed by provident fund contribution and fixed
deposits savings were the most popular forms of investment. The paper also revealed that the

Page | 33
savings for tax purpose was the maximum in age group 50-60 and least in age group 20-30.

Chhajer (2013) has concluded that the primary reasons for individual assessee not achieving their
investment objectives are lack of tax saving investment knowledge, avoiding professional help of
financial advisors.

Gautam, L. (2013) established the relationship between various tax saving instruments and their
effectiveness to attract maximum customers as the main instrument for tax saving.

Sheety (2013) empirically analysed and concluded that individual in order to reduce their tax
burden through tax planning does resort to tax saving investments. While investing, all the
benefits available in a particular investment are not known to individual investors they must
make all possible efforts to see that the terms of investment are known.

Shilpa Vasant Bhide (2013) was of the opinion that benefits of tax planning are best achieved
with professional advice. She stressed on the need of taking help of chartered accountants, tax
consultants and investment planners, with which best results can be achieved by choosing the
best investment option and results in minimizing tax liability.

Mohd Rizat Palil (2013) used three factors namely tax awareness, compliance and religiosity to
study the relation between tax deduction and tax knowledge and found that tax compliance was
low when compared to knowledge towards tax laws. His study was conducted on 70 working
adults in Malaysia. Pearson’s correlation technique was used for analysis to achieve the results.

Gaurav Agrawal, Mini Jain (2013), in their study on “Investor’s perception towards mutual fund
in compassion to other investment avenues”, states that, maximum number of investors are
aware about banks and LIC investment avenue only and most the investors would like to invest
in Real estate because of its rapid growth and it is a most preferred investment avenue including
the mutual fund.

Umamaheswari (2013) observed that the investors lacked awareness about the concept and
working of the investment pattern.

Puneet Bhushan (2014) observed that lack of confidence in making financial decisions is due to
lack of financial knowledge. Poor awareness of financial products leads to poor investments

Page | 34
decisions. Common man is generally unable to interpret tax laws and provisions, this results in
lack of confidence in tax planning. Puneet Bhushan and Yajulu Medury (2013) studied the
behavior of salaried employees as regards tax provisions and found that they are not well
informed about various provisions and deduction available to them which results in difficulty in
computation of tax liability. Salaried assesses have only the basic knowledge of compulsory
savings which are reflected in their salary certificates but not otherwise.

Sopan Kasinath (2014) was of the opinion that majority of the tax payers in India were the upper
middle class and suggested means of availing deduction to minimise tax liability, through
avoidance rather than evasion.

Patil (2014) observed that majority of individual assessees are aware of the investment avenues
and make investments appropriately. The awareness amongst men is more as compared to
females. The study also revealed that there was no relationship between income level and
awareness of investment avenues.

Puneet Bhushan and Yajulu Medury (2014) opined that financial knowledge and financial
attitude go hand in hand. In order to improve financial literacy individuals should be trained with
better education programs on investment planning, savings and tax planning. This in turn would
result in positive and favorable financial attitude among individuals.

Dhanorkar and Sanket (2014) suggest best ways to make use of the additional deduction of Rs.
50000. Young investors should especially use the additional investment limit to enhance their
exposure to equities through ELSS funds, since they offer maximum flexibility. For tax payers
who need money sooner, NSC and five-year tax saving bank fixed deposits would be useful
options.

Dev (2015) carried out a study to explain tax planning measures adopted by different salaried
class are almost uniform. Gender and experience wise assessees have no significant relationship
with the level of tax awareness.

Manjunath (2015) has observed that lack of tax awareness, age group; income level and
occupation are the important influencing component of the attitude of individual assessees
towards tax savings instruments.

Page | 35
Reshma Mathew (2016) conducted a study on working women and felt that Indian tax structure
is complex which makes it essential to plan investments well in advance. With an increase in the
number of working women and financial independence sought by them, it is important to have
thorough knowledge of various provisions and exemptions to select the most tax savvy
investment.

Ledid Bin Abdul Khader (2017), examined tax awareness amongst college teachers and
concluded that they were unaware of the new exemptions, deductions and reliefs provided to
salaried assesses and still followed traditional ways of savings and investments.

Srivasta (2017), researched and found that there are variety of investment options available in the
market but a best investment option can be something which is beneficial to the individual
assessee from the point of view of tax saving and wealth creation in future.

Patel, B. and Modi, V. (2017) collected data with the help of a structured questionnaire from 100
respondents in the region of south Gujrat, to study the impact of demographic factors on the
investment decisions. The study propounded that there is no significant association between the
occupation of the assessee and selection of an investment. The research also provided that
investment decisions are not only dependent on demographic variables.

Preeti Kalgutkar (2018), argues that in order to increase the net wealth of an individual by
increasing the rate of return on their investment, knowledge of various deductions and
exemptions plays an extremely important role.

Dr. Narender Tanwar, Manish Kumar (2019) concluded that In terms of level of awareness
assessees are most aware about the life insurance policy, health insurance policy, provident funds
and bank deposits. Assessees are least aware about mutual funds, ELSS and ULIPs. The
respondents preferred to invest in health insurance and life insurance the most. Whereas ELSS
and Ulips are the least preferred tax saving instruments.

Pankhuri Agarwal, Vipin Jain, and Dr. Surabhi Goel (2020) concluded that women of today’s are
aware about various investment schemes. The most preferred investment avenue among them is
Life insurance policies and bank deposits followed by public Pragyan 2022 119 provident fund.
It has been also found that mostly women didn't take assistance of anybody in making financial

Page | 36
decisions.

Dr. Harish Kumar, Mr Dhruv Saxena, Ms Saraswati Kumari, Ms Anjali Suri (2022), concluded
that the respondents prioritized various tax saving instruments and ranked them accordingly. The
most preffered tax saving instrument is Housing Loan which secured the first rank. Among the
podium finisher in tax saving instruments priority National Saving Certificates secured second &
Public Provident Fund/Employee Provident fund secured third place respectively.

Saloni Mohanty, Dr. Debasis Pahi (2022), stated that Government should organize awareness
programmes to make all the employees aware about deductions and tax saving instruments so
that they can reduce tax liability in ethical manner.

Page | 37
 Research Methodology

Research can be defined as “an activity that involves finding out, in a more or less systematic
way, things you did not know” (Walliman and Walliman, 2011, p.7).
“Methodology is the philosophical framework within which the research is conducted or the
foundation upon which the research is based” (Brown, 2006).
Research methodology refers to the methods and techniques used to portray the research
effectively. It concerns the systematic design of a study to guarantee results that meet the aims
and objectives of the study.

Meaning of Research

 Research is a hunt for the truth. It is getting to know a subject by reading up on it,
reflecting, playing with the ideas, choosing the areas that interest you and following up
on them. Research is the way you educate yourself.

 Research is the careful consideration of study regarding a particular concern or problem

using scientific methods. According to the American sociologist Earl Robert Babbie,
“research is a systematic inquiry to describe, explain, predict, and control the observed
phenomenon. It involves inductive and deductive methods.”

 The purpose of research is to enhance society by advancing knowledge through the

development of scientific theories, concepts and ideas. A research purpose is met through
forming hypotheses, collecting data, analysing results, forming conclusions,
implementing findings into real-life applications and forming new research questions.

 Research involves the use of both inductive as well as deductive methods. Inductive
research methods are used to analyse observable events. Deductive methods are used
to verify the event that has been observed. Inductive research includes the use of
qualitative research methods whereas deductive approach more commonly uses
quantitative analysis.

Page | 38
 3.1 Conceptualization

The study is conducted in a systematic procedure starting from selection of the topic to final
report generation. The integral part was to identify and collect data; they were classified,
analyzed, interpreted and presented in a systematic manner to find the vital points. The overall
process of the methodology followed in the study is explained further.

This study focuses on the awareness level among taxpayers about the tax saving instruments
available under Section 80C. The instruments included are EPF, PPF, Sukanya Samridhi Yojana,
Tax saving Fixed Deposit, Equity Linked Saving Schemes, Unit Linked Insurance Plan (ULIP),
National Pension Scheme (NPS) and National Saving Certificate (NSC). It also studies the
factors considered while investing for different deductions available under 80C.

3.2 Significance of the Study

 To create awareness among tax payers about various tax saving instruments.
 To study the role of CA in tax planning of individuals.
 To understand about various tax saving instruments under 80C of Income Tax Act, 1961.
 To study the impact of various factors on preference level for the investment avenues
available under 80C.
 To determine the awareness level of individuals about tax planning.

3.3 Objectives of the Study

 To ascertain the awareness level among individuals regarding the investment options
available under Section 80C of Income Tax Act, 1961.
 To study the factors considered while investing for different deductions available under
Section 80C of Income Tax Act, 1961.
 To know the sources of awareness about the Investment in Tax Saving Products to the
respondents.

Page | 39
 3.4 Scope of the Study

 The study helps understand the awareness level for various tax saving products under
80C.
 The study evaluates and analyses the tax planning strategies and awareness thereof,
saving habits and investment choices of individuals.
 The study also captured the factors considered while making any choice and thus this can
be helpful to the organization.

3.5 Research Design

Research design can be thought of as the structure of research - it is the "glue" that holds all the
elements in a research project together. We often describe a design using a concise notation that
enables us to summarize a complex design structure efficiently. Research design is the
framework of research methods and techniques chosen by a researcher to conduct a study. The
design allows researchers to sharpen the research methods suitable for the subject matter and set
up their studies for success.

Type of research: - Descriptive research

Descriptive research is also called Statistical Research. The main goal of this type of research is
to describe the data and characteristics about what is being studied. The main idea behind this
type of research is to study frequencies, average, and other statistical calculation. Although this
research is highly accurate, it does not gather the cause behind a situation. The purpose of this
research is to grasp individuals’ preference for investment options according to the new age and
to follow its impact over business performance
Descriptive research includes survey and fact- finding enquires of different kinds. The main
characteristic of this method is that the research has no control over the variable.

Page | 40
 3.6 Sample Design

The respondents selected should be as representative of total population as possible in order to

produce a miniature cross-section. The selected respondent constitute what is technically called a
‘Sample’ and the selection process is called ‘sampling technique’. The survey so conducted, is
known as sample survey.

Sample Size:

It refers to the number of items to be selected from the universe to constitute a sample. Sample
size of the study is 120 respondents.

Sampling Technique

Sampling Technique can be Categorized into two broad categories namely:-

 Probability Sampling
 Non- Probability Sampling

Convenience Sampling is a non-probability sampling technique where subject are selected

because of their convenient accessibility and proximity to the research. So the sample type is
Convenient sampling.

3.7 Collection of Data

Primary Data
Collection of
Data
Secondary
Data

Page | 41
Primary data collection is a process of collecting original data, directly from the source. It is used
in research to gather first-hand information about a problem or topic. The most common use for
primary data is in studies, where researchers need to collect information from experts in their
field.
Secondary data is data collected by someone other than the actual user. It means that the
information is already available, and someone analyses it. The secondary data includes
magazines, newspapers, books, journals, etc. It may be either published data or unpublished data.
The data for the study was collected through Structured Questionnaire which was distributed to
different individuals and the respondents were given enough time to mark their responses. This
was the primary source for data collection.
Apart from this, the data was also collected from the internet. This was the secondary source for
data collection.

3.8 Techniques used for Data Analysis

 Contact Instrument: A structured closed-end Questionnaire is used and the type of

questions are dichotomous and Likert scale.
 Contact Method: The research was conducted by using contact instruments like
questionnaire, interview and observation.

3.9 Data Analysis Tools

The tools are used in this research for interpretations of data are:-
 Tables: Tables are used to represent the reaction of the respondents in a precise manner,
so that it becomes easy to understand and assess the data gathered.

 Bar Graphs: A bar graph is graphical representation of information. It uses bars that
extend to different heights to depict value. Bar graphs can be created with vertical bars,

Page | 42
 horizontal bars, grouped bars (multiple bars that compare values in a category), or
stacked bars (bars containing multiple types of information).

 Pie-charts: Pie-charts are a type of graph that represents data as slices of circle. Pie
charts are a way to graphically display data so that they can be analyzed quickly and
easily.

3.10 Limitations of the Study

 Time restriction is an important aspect of limitation of study

 Some of the replies of the respondents may be biased
 The responses of the study can be regarded as being upholding the current scenarios but
may tend to vary when the environment changes.
 Respondents were busy with their own work so they could give me little time for
consultation.

Page | 43
 Data Analyis and Interpretation

Question 1) When do you formulate your tax plan during the financial year?

Options Percentage
Beginning of the year 16%
End of the year 64%
At anytime 20%
No planning 0%

70%

60%

50%

40%

30% 64%

20%

10% 20%
16%

0% 0%
Beginning of the End of the year At anytime No planning
year

Interpretation:
It is evident that 64% of the individuals responded that they formulate their tax plan at the end of
the year. 20% of the individuals opted for the option3 at anytime. 16% said that they formulate
their tax plan at the beginning of the financial year. There were no individuals who responded to
the option of No planning.

Page | 44
Question 2) Since how many years have you been investing in Tax Savings Instruments?

Years Percentage
0-1 9%
1-5 19%
5-10 24%
10-15 36%
15 years and above 12%

40%

35%

30%

25%

20%
36%
15%
24%
10% 19%
5% 12%
9%
0%
0-1 1-5 5-10 10-15 15 years and
above

Interpretation:
The above graph and table depicts that 36% of the respondents have been investing in tax saving
instruments under 80C for 10-15 years whereas 9% of the respondents said that they have been
investing from last 0-1 year. 19% of the respondents have been investing in tax saving
instruments from last 1-5 years whereas 24% and 12% of the individuals have been investing
from last 5-10 years and 15 years above respectively.

Page | 45
Question 3) What factor do you consider while investing in any tax saving avenue?

Options Percentage
Returns 46%
Awareness 31%
Liquidity 23%

23%

46%
Returns
Awareness
31% Liquidity

Interpretation:
Out of all the factors, 46% respondents consider returns while investing in any tax saving
avenue. 31% respondents considered their level of awareness about that instrument and 23%
considered liquidity of the product as a factor while investing in any tax saving avenue.

Page | 46
Question 4) What do you prefer out of the following options?

Options Percentage

Higher returns with low tax deductions 39%

Lower returns with high tax deductions. 61%

39%
Higher returns with low
tax deductions

61%
Lower returns with high
tax deductions.

Interpretation:
It is evident that 61% of the respondents responded that they prefer lower returns with high tax
deductions out of the given two options. 39% said that they would prefer higher returns with low
tax deductions. Thus it can be said that majority respondents look for effective final returns in
their hand.

Page | 47
Question 5) What is the source of information about deductions available while filing for
taxation?

Options Percentage
Newspapers and Magazines 8%
Family and Friends 24%
Internet 21%
Advisors 4%
Certified Market Proessionals/Financial Planners 43%

8% Newspapers and Magazines

Family and Friends

43% 24%
Internet

Advisors

21%
4% Certified Market
Proessionals/Financial
Planners

Interpretation:
As depicted by above data for 43% of respondents, certified market professionals and financial
planners are the major sources of their information about deductions available while filing for
taxation. 21% of the individuals and 24% of the individuals said that internet and family &
friends are the source of investment advice respectively. Newspapers, magazines and advisors
have the least number of responses i.e. 8% and 4% respectively.

Page | 48
Question 6) From the below rank the knowledge about the investment options:

Options Fully Aware Partially Aware Not Aware

National Pension Scheme
69% 22% 9%
(NPS)
PPF 78% 20% 2%
EPF 74% 21% 5%
Equity Linked Saving Schemes
62% 27% 11%
(ELSS)
Sukanya Samridhi Yojana
59% 34% 7%
(SSY)
5 Year Bank FD 84% 16% 0
National Savings Certificate
76% 20% 4%
(NSC)
Unit Linked Insurance Plan
32% 48% 20%
(ULIP)

Unit Linked Insurance Plan (ULIP) 32% 48% 20%

National Savings Certificate (NSC) 76% 20% 4%

5 Year Bank FD 84% 16% 0

Sukanya Samridhi Yojana (SSY) 59% 34% 7%

Fully Aware
Partially Aware
Equity Linked Saving Schemes (ELSS) 62% 27% 11%
Not Aware

EPF 74% 21% 5%

PPF 78% 20% 2%

National Pension Scheme (NPS) 69% 22% 9%

0% 20% 40% 60% 80% 100%

Page | 49
Interpretation:

 As depicted by the bar graph, 69% respondents are fully aware about National Pension
Scheme, 22% are partially aware and 9% are not at all aware.

 The graph shows that 78% respondents are fully aware about PPF, 20% are partially
aware and 2% are not at all aware.

 As depicted by the bar graph, 74% respondents are fully aware about EPF, 21% are
partially aware and 5% are not at all aware.

 As shown by the bar graph, 62% respondents are fully aware about Equity Linked Saving
Scheme (ELSS), 27% are partially aware and 11% are not at all aware.

 As depicted by the graph, 59% respondents are fully aware about Sukanya Samridhi
Yojana (SSY), 34% are partially aware and 7% are not at all aware.

 The bar graph shows that 84% respondents are fully aware about 5 Year Bank FD, 16%
are partially aware.

 As depicted by the bar graph, 76% respondents are fully aware about National Saving
Certificate, 20% are partially aware and 4% are not at all aware.

 As shown by the bar graph, 32% respondents are fully aware about Unit Linked
Insurance Plan (ULIP), 48% are partially aware and 20% are not at all aware.

Page | 50
Question 7) And if you prefer investing in any of the above, what is the major reason for
you selecting an investment avenue?

Options Percentage
Returns 46%
Tax Deductions 31%
Savings for uncertainities 23%

50%
45%
40%
35%
30%
25% 46%
20%
31%
15% 23%
10%
5%
0%
Returns Tax Deductions Savings for
uncertainities

Interpretation:
Out of all the factors, 46% respondents consider returns while investing in any tax saving
avenue.31% respondents considered tax deductions and 23% considered savings for uncertainties
as a factor while investing in any tax saving avenue.

Page | 51
Question 8) Are you satisfied from Investment in Tax Saving Products?

Options Percentage
Highly Satisfied 13%
Satisfied 22%
Neutral 34%
Dissatisfied 27%
Highly Dissatisfied 4%

4%
13%

Highly Satisfied
27%
Satisfied
22% Neutral
Dissatisfied
Highly Dissatisfied

34%

Interpretation:
As mentioned about different tax saving avenues, 34% of the respondents are neutral about their
satisfaction level from their investment in tax saving products. Only 13% of individuals are
highly satisfied and 22% are satisfied. 27% of individuals are dissatisfied from their investments
whereas 4% are highly dissatisfied.

Page | 52
Question 9) Do you think Lock in period in tax saving instruments is a discouragement for
individuals?

Options Percentage
Strongly Agree 34%
Agree 26%
Neutral 38%
Disagree 2%
Strongly Disagree 0%

40%

35%

30%

25%

20%
38%
34%
15%
26%
10%

5%

0% 2%
0%
Strongly Agree Agree Neutral Disagree Strongly Disagree

Interpretation:
34% of individuals strongly agree that the Lock in period in tax saving instruments is a
discouragement but 2% of the respondents do not agree with this. 26% individuals agree with the
statement whereas 38% are neutral about this.

Page | 53
Question 10) I take Life Insurance policies primarily towards:

Options Percentage
Saving my income tax 6%
Investing for long- term goals while covering risk
46%
of life
Investing for my family security 24%
Investing for my retirement 18%
I do not have any life insurance policy 6%

6% 6%
Saving my income tax
18%
Investing for long- term goals
while covering risk of life
Investing for my family security

46% Investing for my retirement

24% I do not have any life insurance

policy

Interpretation:
Most of the respondents i.e. 46% answered that they invest in LIC for long term goals while
covering risk of life. 24% respondents said that they invest in LIC for their family security. Only
6% invested for saving their income tax and 6% do not have any life insurance policy. 18%
people responded that invest for their retirement.

Page | 54
 5.1 Findings of the Study

 64% of respondents formulate their tax plan at the end of the year whereas 16%
formulate their tax plan at the beginning of the year. This shows that individuals wait for
the end of the financial year to do tax planning.
 Most of the respondents i.e. 36% have been investing in tax saving instruments for the
last 10-15 years whereas only 9% of the respondents have been investing in tax saving
instruments from last 0-1 years.
 Major factor that individuals consider while investing in any tax saving avenue is returns
on that investment. By returns they mean the effective return after the lock in period
taking into account the inflation level.
 Most of the individuals prefer lower returns with high tax deductions that they can claim
so that the return in hand is a reasonable amount.
 It was found that for most of the individuals i.e. 43% have certified market professionals
such as CA are their main source of information about deductions available while filing
for taxation.
 As per the survey conducted the awareness level for Bank Fixed Deposit is the highest
among the respondents whereas there is need for complete awareness regarding
National Pension Scheme (NPS), Public Provident Fund (PPF), Equity Linkedd Saving
Scheme (ELSS), Unit Linked Insurance Plan (ULIP) and Sukanya Samridhi Yojana (SSY).
 Respondents were neutral about their satisfaction level from their investments in tax
saving products.
 34% respondents strongly agreed that lock in period in tax saving instrument is
discouraging for them.
 Also, it was found that 46% of respondents took up LIC policy as their investment for
long term goals while covering the risk of life.

Page | 55
 5.2 Suggestions and Recommendations

 Individuals or taxpayers should be completely aware about various investments that are
eligible for tax deductions so that they can claim maximum benefit of it with returns as
well.

 Individuals may not always aware of all the technical details about the scheme which
they chose for investment. They might choose a particular scheme for one benefit while
being ignorant about other schemes which provide same or better benefits with better
terms. Hence, it is the duty of tax consultant to provide relevant investment advice.

 It is also suggested that individuals should do tax planning from starting of the financial
year itself so that there are no last minute hassle.

 Information is something which is shaping business and world constantly in this century.
More is the amount and quality of information better will be the decision quality.
Therefore it is recommended that Certified Market Professionals/Financial Planners need
to update themselves to the amendments made by Income Tax Department on regular
basis.

Page | 56
 5.3 Conclusion

The study focuses on the awareness level regarding various tax saving instruments under Section
80C of Income Tax Act, 1961. From this study it was found that people still have partial
knowledge about the taxability of returns or redemption value. Returns associated with
instruments are considered while investing in any of the instruments.

As this study analyzed the tax planning strategies that individuals adopt to avoid taxes by legal
means, it was found that individuals start planning for their investments in tax saving products a
little late. So, they can start planning from beginning of the financial year itself. People still need
to gain knowledge about various tax saving instruments so that they can take a conscious
decision and thus minimizing their tax liability that would arise in future.

It can be concluded that the respondents have basic knowledge and awareness about various tax
saving schemes u/s 80 C but still there is scope for increase in knowledge and awareness level
among the individuals so that they can invest in instruments that can provide them high return
with safety in long term.

Page | 57