A Study of Financial Planning

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a study of financial planning
Bachleor of commerce (Bharathidasan University)
Studocu is not sponsored or endorsed by any college or university

Downloaded by Kishor Khatik (kishorwkhatik@gmail.com)
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A STUDY ON FINANCIAL PLANNING

FOR SALARIED EMPLOYEES
AND STRATEGIES FOR TAX SAVINGS
By
R. JANANI
(Reg No: 130719631020)
Of
JERUSALEM COLLEGE OF ENGINEERING
(An Autonomous Institution, Affiliated to Anna University)
NARAYANAPURAM, PALLIKARANAI,
CHENNAI-600100
A SUMMER PROJECT REPORT
Submitted to the
DEPARTMENT OF MANAGEMENT STUDIES
In partial fulfillment of the requirements for
the award of the degree of
MASTER OF BUSINESS ADMINISTRATION
DEC 2020

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DECLARATION
I, R. JANANI (Reg. No. 130719631020) a bonafide student of Department of

Management Studies of JERUSALEM COLLEGE OF ENGINERING, CHENNAI -
100 ,declare that the Project title “ A STUDY ON FINANCIAL PLANNING FOR
SALARIED EMPLOYEES AND STRATEGIES FOR TAX SAVINGS ” in partial
fulfillment for the award of Master of Business Administration of Anna University,
Chennai, Tamil Nadu.
Date:
Place: CHENNAI (R. JANANI)

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ABSTRACT
The word “Tax” is derived from the Latin word called “Taxove” and “Taxo” means
to estimate, appreciation or value. The word Income Tax itself implies it is tax on earnings.
It plays vital role in the national economy. Tax management is an activity conducted by the
tax payer to reduce the tax liability and maximize the use of all available deductions,
allowances, exclusions, as per income tax act 1961.
It is a techniques to prepare of financial planning for longer term goal. In this paper
analyzing investment products for tax saving purpose. The objectives behind this research
paper is to understand tax saving investment management strategies among salaried
individual on the same point of view this research is an attempt to understand investment
pattern among salaried individual and what are all the factors are influencing on the
investment planning among the salaried employees. The study on Tax planning measures
adopted by salaried class aims at study the awareness of tax planning measures among the
salaried class.
This paper aims to study on the awareness of tax planning measures among the
salaried employees. The present study is about the study on financial planning for salaried
employees and strategies for tax savings in this research paper there will be an introduction of
the study about financial planning and tax planning measures, the general profile, the
objectives,scope, need and limitation of the study.
The research methodology of the study which is covers research design, sampling
method and tools for analysis this is used to followed by data analysis with table and chart
and chi square and weighted average and correlation.
All this tools done by using SPSS software. From that the findings and suggestion
and conclusion are give and finally added the bibliography and websites searched for the
project. Annexure is attached.

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ACKNOWLEDGEMENT
I would like to thanks Dr. M. MALA, M.A, M. Phil., and CEO, Jerusalem College of
Engineering for the sustained support in providing all the resources required to complete
the project.
I would like to thanks Dr. M. RAMALINGAM, B.E, M.S, PhD, Director, Jerusalem
College of Engineering for his support in providing all resources to complete the project.
I would like to extend my thanks to Dr. S. PRINCE AROCKIA DOSS, M.Sc., B.Tech.,
M.E., PhD, Principal and Jerusalem College of Engineering for his support in providing all
resources to complete the project.
I wish to regard my sincere thanks to Dr. T.V. AMBULI, M.COM, MBA, M.PHIL, PhD,
Head of the Department, Jerusalem college of Engineering Chennai for her moral support
and continuous encouragement.
I wish to regard my sincere thanks to Mr.S.V.PRAVEEN BCA, MBA, project guide and
all the Faculty members of MBA department for their valuable advice and kind
cooperation without which the project report would not have emerged as successful one.
I am grateful to my friends who having rendered their helping hands to do this project
report successfully. I also express my sincere gratitude to my parents for their moral
support and financial help who were responsible for my stand at this point.
(R. JANANI)

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TABLE OF CONTENTS
CHAPTER TITLE PAGE

NO
TITLE/FRONT PAGE I
DECLARATION ii
ABSTRACT iii
ACKNOWLEDGEMENT iv
TABLE OF CONTENTS v
LIST OF TABLES vii
LIST OF CHARTS viii
01 INTRODUCTION 1
1.1 INTRODUCTION OF THE STUDY 2
1.2 GENERAL PROFILE 3
1.2.1 WHAT IS FINANCIAL PLANNING? 3
1.2.2 OBJECTIVES OF FINANCIAL PLANNING 3
1.2.3 IMPORTANCE OF FINANCIAL PLANNING 3
1.2.4 FINANCIAL PLANNING FOR BEGINNERS 4
1.2.5 FINANCIAL PLANNING PROCESS 4
1.2.6 ADVANTAGES OF FINANCIAL PLANNING 5
1.2.7 INVESTMENTS PLANS FOR SALARIED 5

EMPLOYEES
1.2.8 TAX LAW IN INDIA 8
1.2.9 CONCEPT OF TAX PLANNING 8
1.2.10 INCOME SLAB AND TAX RATES FOR FY 10

2020-21
1.2.11 STRATEGIES FOR TAX SAVINGS 10

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1.3 OBJECTIVE OF THE STUDY 11
1.3.1 PRIMARY OBJECTIVE 11
1.3.2 SECONDARY OBJECTIVE 11
1.4 SCOPE OF THE STUDY 12
1.5 NEED OF THE STUDY 12
1.6 LIMITATIONS OF THE STUDY 12
02 LITERATURE SURVEY 13
2.1 REVIEW OF LITERATURE 14
03 METHODOLOGY 18
3.1 RESEARCH DESIGN 19
3.2 RESEARCH PROCESS 19
3.3 SAMPLING TECHNIQUES 19
3.4 DATA COLLECTION METHOD 19
3.4.1 PRIMARY DATA 19
3.4.2 SECCONDARY DATA 19
3.5 TOOLS FOR ANALYSIS 20
04 DATA ANALYSIS AND INTERPRETATION 22

4.1 PERCENTAGE ANALYSIS 23
4.2 CHI-SQUARE TEST 39
4.3 WEIGHTED AVERAGE 40
4.4 CORRELATION ANALYSIS 42
05 SUMMARY 46
5.1 FINDING 47
5.2 SUGGESTIONS 49
5.3 CONCLUSION 50
ANNEXURE
REFERENCES

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LIST OF TABLES
S.NO TITLE PAGE

NO.
1.2.10 INCOME SLAB AND TAX RATES FOR FY 2020-21 10
4.1.1 GENDER OF THE RESPONDENTS 23
4.1.2 AGE OF THE RESPONDENTS 24
4.1.3 MARITAL STATUS OF THE RESPONDENTS 25
4.1.4 TYPE OF EMPLOYMENT OF THE RESPONDENTS 26
4.1.5 OCCUPATION OF THE RESPONDENTS 27
4.1.6 INCOME SLAB OF THE RESPONDENTS 28
4.1.7 HOW MUCH OF INCOME IN A INVESTMENT 29
4.1.8 HOW MUCH RETURN DO YOU GET FROM YOUR 30

INESTMENT OF THE RESPONDENTS
4.1.9 IN WHICH AREA DO YOU SPEND MORE ON YOUR 31

MONTHLY INCOME
4.1.10 WHERE DO YOU GET INVESTMENT INFORMATION 32
4.1.11 HOW DO YOU INVEST YOUR SAVINGS 33
4.1.12 HOW DO YOU SAVE FROM YOUR INCOME 34
4.1.13 I CONSULT THE TAKING MY FINANCIAL DECISION 35
4.1.14 DO YOU FULLY UTILIZE INCOME TAX BENEFITS 36
4.1.15 WHEN DO YOU FORMULATE YOUR TAX PLAN 37

DURING A FINANCIAL YEAR
4.1.16 DO YOU KNOW ABOUT THE TAX SAVINGS 38

STRATEGIES UNDER THE INCOME TAX ACT
4.2.1 CHI-SQUARE TEST 39
4.3.1 WEIGHTED AVERAGE OF FACTOR INFLUENCING 40

SALARIED EMPLOYEES FINANCIAL PLANNING
4.4.1 CORRELATION TEST(1) 42
4.4.2 CORRELATION TEST(2) 44

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LIST OF CHARTS
S.NO TITLE PAGE

NO
4.1.1 GENDER OF THE RESPONDENTS 23
4.1.2 AGE OF THE RESPONDENTS 24
4.1.3 MARITAL STATUS OF THE RESPONDENTS 25
4.1.4 TYPE OF EMPLOYMENT OF THE RESPONDENTS 26
4.1.5 OCCUPATION OF THE RESPONDENTS 27
4.1.6 INCOME SLAB OF THE RESPONDENTS 28
4.1.7 HOW MUCH OF INCOME IN A INVESTMENT 29
4.1.8 HOW MUCH RETURN DO YOU GET FROM 30

YOUR INESTMENT OF THE RESPONDENTS
4.1.9 IN WHICH AREA DO YOU SPEND MORE ON 31

YOUR MONTHLY INCOME
4.1.10 WHERE DO YOU GET INVESTMENT 32

INFORMATION
4.1.11 HOW DO YOU INVEST YOUR SAVINGS 33
4.1.12 HOW DO YOU SAVE FROM YOUR INCOME 34
4.1.13 I CONSULT THE TAKING MY FINANCIAL 35

DECISION
4.1.14 DO YOU FULLY UTILIZE INCOME TAX 36

BENEFITS
4.1.15 WHEN DO YOU FORMULATE YOUR TAX PLAN 37

DURING A FINANCIAL YEAR
4.1.16 DO YOU KNOW ABOUT THE TAX SAVINGS 38

STRATEGIES UNDER THE INCOME TAX ACT

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Chapter-1
INTRODUCTION

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1. INTRODUCTION OF THE STUDY
Financial Planning is an indispensable activity for businessman, Student, self employed,

Professional, etc., But it is critical for a salaried person. The reason for this limited and fixed
resource for generating a flow of income. It is important to understand the spending and saving
pattern. Being productive alone is not sufficient it is critical to be more efficient and effective
money wise.
Some of the benefits like life and health insurance for salaried employees provide risk
coverage. One can make better financial plans through tax savings and paying proper taxes. Tax
planning allows all elements of the financial plans to function in system to delivers maximum tax
efficiency.
In short first save for the financial goals and then spend wisely for your needs if our hard
earned money does not work hard for us, the whole purpose of earning get departed one must
take charge his/her finances to ensure financial stability and independence.
The tax is also important for all the people. Tax is a fee charged by a government on a
product, income or activity. There are two types of taxes – direct taxes and indirect taxes. If tax is
levied directly on the income or wealth of a person, then it is a direct tax e.g. income-tax. If tax is
levied on the price of a good or service, then it is called an indirect tax e.g. excise duty. In the
case of indirect taxes, the person paying the tax passes on the incidence to another person.

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1.2 GENERAL PROFILE

1.2.1 WHAT IS FINANCIAL PLANNING?
Financial planning is the process of achieving your life goals by using different investment
options with your current resources through proper and disciplined money management. So
financial planning is not only about money but it is all about life, about fulfilling your wishes,
dreams, aspiration and your enjoyment is achieving them. Financial planning is the procedure of
developing a personal road map for the financial well being of the investor. Below are the inputs
of the process of financial planning:
The finances of the investor, i.e the income of the investor, liabilities,and his/her assets.
The risk appetite of the investor.
The goals of the investor, I.e. his/her future ans current financial requirements.
1.2.2 OBJECTIVE OF FINANCIAL PLANNING

To ensure the availability of funds: The financial planning is a procedure of fund generation
and making that fund available at the tike of the requirement of the investor.
To generate the capital structure: The capital structure majorly consists of the company's
capital, which is, the proportion and kind of the capital that is needed in any business.
Time and source of fund estimation: Time is one of the game-changers for any business. It is
essential to deliver the right fund at the right place at the right time. It is as important as the
amount generation itself.
Avoiding the not so necessary funds: an important objective of every company is to ensure that
it does not raise any unnecessary resources. Shortage of fir, and fund are unable to meet the
obligations of the payment.
1.2.3 IMPORTANCE OF FINANCIAL PLANNING

Financial planing is something that defines the targets of a company,techniques, policies,
financial activities last for the long term. The importance of financial planning is as follows:
It guarantees adequate funds.

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The financial planning helps to ensure harmony between the incoming and outgoing of assets
with the goal with which the stability is kept up.
This planning also supports the expansion and developmental programmers that supports the
long-run organizations substances.
The planning also decreases the chances of vulnerabilities if an organization wants to change the
pattern of its business sector.
1.2.4 FINANCIAL PLANNING FOR BEGINNERS

Financial planning is a procedure wherein one gets his/her financial framework for achieving
his/her life goals in a very planned and systematic way.The beginners should focus on the below
point while making a financial plan:
Manage money
Regulate their expenses wisely
Manage and maintain a personal balance sheet
Planning well for retirement
Make a personal portfolio of investment
Planning the taxes
1.2.5 FINANCIAL PLANNING PROCESS

The financial planning process that one should follow to achieve his/her financial goals is as
follows:
Step 1: Understanding the current financial situation: Those who want to start financial
planning must understand his/her present financial situation. It is suggested to understand the
source of income,assets, debt, liabilities, etc. It provides a clear picture of ones current financial
situation.
Step 2: Understand the goals: Every member of the family must list down the current and
future goals of the family. After understanding the goal, it is suggested to prioritize every goal by
taking the consensus of all the members of the family and keep a period for each.

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Step 3: Know the financial gaps: Once a person understands where he/she stands financially,
and where he/she or his/her family wants it to be, he/she will be able to know the financial gaps.
Step 4: Make personal financial plan: After understanding the financial status, goals and gaps,
it is time to make some personal financial plan. For the same, it is suggested to review different
options of investment like mutual funds, stocks,PPF, Fixed deposits, bonds, etc and get to know
which instrument or combination of any of these best suits the requirements.
Step 5: Time to implement the financial plan: It is time to put all things into action. For the
same, it is needed to gather all the required documents, open the required demat,bank or trading
account, get connected with the broker and get things started.
Step 6: Review the plan with time: Planning finances is not an activity of one-time rather it is
an o-going process. The success of any plan is possible only when one sticks to his/her plan
reviews that plan with time. So, the final step is to check the financial planning periodically.
1.2.6 ADVANTAGES OF FINANCIAL PLANNING

The financial planning helps to maintain a good balance between expenses and income.
The plan helps to take care of the cash flow and hence reduces the unwanted expenditure.
Helps in crating corpus and improve savings.
For maximizing the investment returns.
For reducing the tax liability.Ensures a financially secure post retirement life.
1.2.7 INVESTMENTS PLANS FOR SALARIED EMPLOYEES
Salaried individuals have different investment requirement than self-employed or other
professionals. They have fixed monthly cash inflow to meet their expenses and save for various
life goals. While most of the salaried individuals are covered under post-retirement security in the
form of employees provident fund or other mandatory retirement schemes, the corpus generated
are often inadequate to meet post-retirement schemes.
1. Equity Mutual Fund
Equity mutual funds (MFs) invest at least 65% of their corpus in equities. Being invested
in equities, these funds outperform fixed income instruments and inflation by a wide margin over
the long term. These funds are best suited for retail investors who want to invest in stocks but

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lack the required expertise or time to do so. Equity funds also include a special category of funds
called Equity Linked Savings Schemes (ELSS), which qualify for tax deduction under Section
80C of the Income Tax Act. These funds also have the shortest lock-in period of 3 years among
all the Section 80C options.
Investment in equity mutual fund can be started with just Rs 5000 for lumpsum and additional
investments can be made for just Rs 1000. In case of ELSS, the minimum and subsequent
investment amount is Rs 500 per month. If you opt for SIPs instead of lumpsum investment, the
minimum instalment is Rs 500 and Rs 1,000 for ELSS and other mutual funds, respectively.
2. Debt Mutual Fund
Debt mutual funds invest in fixed income instruments such as corporate debt securities,
corporate bonds, government securities, and money market instruments, among others. Although
debt funds are prone to minimal risk, they are less volatile than equities generating higher returns
than fixed deposits. Moreover, unlike fixed deposits, debt funds do not levy premature
withdrawal penalty. However, a few debt funds may charge exit load of up to 3% on redeeming
your investment before a pre-determined period.
3. Fixed Deposit
Fixed deposits guarantee interest income and principal repayment at booked rates,
regardless of any changes in the card rate during the deposit tenure. At present, small finance
banks offer highest card rate of up to 9% p.a. (up to 9.6% p.a. for senior citizens) while the
highest card rates offered by other private sector banks go up to 8.25% p.a. (8.75% p.a. for senior
citizens). The highest card rates offered by public sector banks go up to 7% p.a. (up to 7.5% p.a.
for senior citizens). One can also save taxes under Section 80C by investing in tax-saving FDs.
However, interest earned is taxable as per tax slab of the depositor. These tax-saving FDs come
with a lock-in period of 5 years.
4. Public Provident Fund
PPF is one of the safest funds among all investment options because of the sovereign
guarantee from the government. PPF investments also qualify for tax deduction under Section
80C. With a lock-in period of 15 years, PPF is currently offering 8% returns compounded
annually. However, the Ministry of Finance reviews the interest rate every financial quarter basis
the government bond yields. Additionally, you can extend your investment period after the

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maturity of 15 years with 5 years block. Maximum limit to invest in PPF is Rs 1.5 lakh in a
financial year while the minimum amount is Rs 500.
Lack of liquidity is the PPF’s biggest drawback. Partial withdrawal is permissible only from the
7th FY onwards. Premature closure of the account is allowed after the 5th financial year for
medical treatment of serious ailments or life-threatening diseases or for higher education.
5. National Pension System
NPS is a market-linked product for retirement planning. Salaried investors not falling
under the ‘Government or Corporate’ model can join NPS under the ‘All Citizens of India’ model.
The investments remain locked-in till you reach 60 years of age, which can be extended up to 70
years. Minimum 40% of the accumulated corpus has to be invested to avail annuity while the
remaining tax-exempt amount is withdrawn on maturity. You can avail tax deduction of up to Rs
1.5 lakh under Section 80C and an additional deduction of up to Rs 50,000 under Section 80
CCD 1(B).
6. Voluntary Provident Fund
VPF is an extension of the EPF, yielding the same interest rate. Apart from mandatory
contribution towards EPF, you can voluntarily choose to increase your contribution to up to
100% of your basic salary and dearness allowance in VPF. The interest rate is reviewed by the
government every year and the investment amount qualifies for tax deduction under Section 80C.
The interest earned is tax-exempt provided the employee continues to be in service for 5 years or
more.
7. National Savings Certificate
National Savings Certificate is a fixed income investment scheme with a lock-in period of
5 years offering an interest rate of 8% compounded annually. Just like the PPF, the NSC interest
rates are reviewed every quarter. With minimum deposit of Rs 100 and no maximum deposit
limit, you can claim tax deduction of up to Rs 1.5 lakh under Section 80C.
8. Unit Linked Insurance Plan
ULIP combines life insurance with market-linked investment. A part of the premium goes
towards insuring your life while the other part is invested in stocks, bonds, market instruments,
etc. They offer both death and maturity benefits. ULIPs come with a lock-in period of 5 years and
qualify for tax deduction under Section 80C. Insurers also offer various fund options to suit

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varying risk appetites. One can also switch between these fund options to cater to the changing
risk appetite or market conditions.
1.2.8 TAX LAW IN INDIA

The levy of income tax in India is governed by the income tax act 1961. Tax is a fee
charged by a government on a product, income or activity. For salaried assessees, the approach
for tax planning must be three fold: First is investing in savings schemes out of the current year
income, so as to reduce the tax liability to the absolute minimum. Next is effecting proper
investment of the surplus, if any, after meeting expenses (including taxes) so as to reap (i) the
maximum tax benefit on the income from such investments and (ii) to obtain maximum returns
on the investments. Finally, planning some special measures in the pre-retirement stage as well as
effecting investment of retirement benefits in appropriate areas so as to ensure regular and
adequate flow of income after retirement.
1.2.9 CONCEPT OF TAX PLANNING

Tax Evasion
Tax Evasion means not paying taxes as per the provisions of the law or minimizing tax by
illegitimate and hence illegal means. Tax Evasion can be achieved by concealment of income or
inflation of expenses or falsification of accounts or by conscious deliberate violation of law.
Tax Evasion is an act executed knowingly willfully, with the intent to deceive so that the tax
reported by the taxpayer is less than the tax payable under the law.
Example: Mr. A, having rendered service to another person Mr. B, is entitled to receive a sum of
say Rs. 50,000/- from Mr. B. A tells B to pay him Rs. 50,000/- in cash and thus does not account
for it as his income. Mr. A has resorted to Tax Evasion.

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Tax Avoidance
Tax Avoidance is the art of dodging tax without breaking the law. While remaining well
within the four corners of the law, a citizen so arranges his affairs that he walks out of the
clutches of the law and pays no tax or pays minimum tax. Tax avoidance is therefore legal and
frequently resorted to. In any tax avoidance exercise, the attempt is always to exploit a loophole
in the law. A transaction is artificially made to appear as falling squarely in the loophole and
thereby minimize the tax. In India, loopholes in the law, when detected by the tax authorities,
tend to be plugged by an amendment in the law, too often retrospectively. Hence tax avoidance
though legal, is not long lasting. It lasts till the law is amended.
Example: Mr. A, having rendered service to another person Mr. B, is entitled to receive a sum of
say Rs. 50,000/- from Mr. B. Mr. As other income is Rs. 200,000/-. Mr. A tells Mr. B to pay
cheque of Rs. 50,000/- in the name of Mr. C instead of in the name of Mr. A. Mr. C deposits the
cheque in his bank account and account for it as his income. But Mr. C has no other income and
therefore pays no tax on that income of Rs. 50,000/-. By diverting the income to Mr. C, Mr. A
has resorted to Tax Avoidance.
Tax Planning
Tax Planning has been described as a refined form of tax avoidance and implies
arrangement of a persons financial affairs in such a way that it reduces the tax liability. This is
achieved by taking full advantage of all the tax exemptions, deductions, concessions, rebates,
reliefs, allowances and other benefits granted by the tax laws so that the incidence of tax is
reduced. Exercise in tax planning is based on the law itself and is therefore legal and permanent.
Example: Mr. A having other income of Rs. 200,000/- receives income of Rs. 50,000/- from Mr.
B. Mr. A to save tax deposits Rs. 60,000/- in his PPF account and saves the tax of Rs. 12,000/-
and thereby pays no tax on income of Rs. 50,000.

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Tax Management
Tax Management is an expression which implies actual implementation of tax planning

ideas. While that tax planning is only an idea, a plan, a scheme, an arrangement, tax management
is the actual action, implementation, the reality, the final result.
Example:Action of Mr. A depositing Rs. 60,000 in his PPF account and saving tax of Rs.
12,000/- is Tax Management. Actual action on Tax Planning provision is Tax Management.
1.2.10 INCOME SLAB AND TAX RATES FOR FY 2020-21

Taxable income Tax Rate
Up to Rs. 250000 Nil
Rs. 250001 to Rs. 500000 5%
Rs. 500001 to 1000000 20%
Above Rs. 1000000 30%
1.2.11 STRATEGIES FOR TAX SAVINGS: TAX SAVING INSTRUMENTS

UNDER THE INCOME TAX ACT 1961.
Section 80C - The maximum tax exemption limit under Section 80C has been retained as Rs 1.5
Lakh only. The various investment avenues or expenses that can be claimed as tax deductions
under section 80c are as below:
PPF (Public Provident Fund), EFP (Employee Provident Fund), ELSS (Equity Linked Saving
Scheme), Life Insurance Premium, NSC (National Saving Certificate), Kids Tuition fee, Principle
repayment of home loan, SCSS (Post office Senior Citizen Saving Scheme).

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Section 80CCC - LIC (Life Insurance Corporation of India)

Section 80CCD - Employee can contribute to Government notified Pension Schemes (like
National Pension Scheme – NPS).
Section 80D - Deduction u/s 80D on health insurance premium
Section 80DD - Medical treatments of your dependents (spouse, parents, kids or siblings)
Section 80DDB - Senior Citizens, it is mandatory for an individual to obtain ‘Doctor Certificate’
or ‘Prescription’ from a specialist working in a Govt or Private hospital.
Section 80E - Take any loan for higher studies
Section 80EE - deduction for interest on housing loan borrowed for acquisition of self occupied
house property by an individual.
Section 80G - Charitable institutions can be claimed as a deduction under Section 80G of the
Income Tax Act.
Section 80GG - The Tax Deduction amount under 80GG has been increased from Rs 24,000 per
annum to Rs 60,000 per annum.
1.3 OBJECTIVE OF THE STUDY
PRIMARY OBJECTIVE
To study on financial planning for salaried employee and strategies for tax savings.
SECONDARY OBJECTIVES
1. To study the pattern of tax planning by salaried employee.
2. To study on the level of awareness of the salaried employee on various taxes planning
measures available under the Income Tax Act.
3. To study the tax saving schemes of income tax.

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1.4 SCOPE OF THE STUDY
The scope of tax planning for salaried employee evaluates the extent of awareness of
employees on tax laws and tax planning measures. The savings habits, investment pattern,
repayment of liabilities, tax planning measures adopted for the period under study.
1.5 NEED OF THE STUDY
A salaried person should be aware of the income- tax laws as it related to income, the
deduction and reliefs that are available. To analyze the safe investment and to find out the
strategies of tax savings under the income tax act. The needs of study have to fill the gap that has
identified in the previous researcher.
1.6 LIMITATIONS OF THE STUDY
1. The period of study is limited.
2. People generally were reluctant to disclose information relating to their savings,

investments and tax planning measures.
3. The study has a limitation of time, place and resources.

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13
CHAPTER 2
LITERATURE SURVEY

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2.1 REVIEW OF LITERATURE
GS Sumesh, Awareness and perceptions regarding tax planning options among

salaried people (2020). To avail of these benefits, one should have good knowledge and
awareness in both the Income Tax act and the annual finance budget of union ministry. Under
this circumstance, an attempt is made to measure the level of awareness and perception towards
tax planning schemes among salaried employees. For this study, responses are collected from
salaried employees in Kottayam taluk and their responses are analyzed and presented by using
different statistical tools to make a conclusion.
Siddhaarth Dhongde, Vilas Epper, Tax Saving Investment Strategies among

Salaried Individuals in Aurangabad City (2020). “. The objective behind this research paper is
to understand tax saving investment Management strategies among salaried individual. On the
same point view this research is an attempt to understand investment preference pattern and tax
saving investment patterns among salaried individuals. Study outcomes reveals that the foremost
adopted combination of tax saving instrument are PPF (Public Provident Fund), which got the
primary rank during this study and therefore the other are Children education, LIC, Home Loan,
NPS and other priority gives to Medical Insurance, National saving certificates, Fixed Deposits
and ELSS.
Ali Medabesh, Asif Jeelani Khan, Financial Assets and the preference of salaried
class Assesses (2020). The habit of investment in financial assets plays an important role in
financial planning of an individual. The financial assets not only provide benefits in terms of
returns and tax savings among others, plans like SIPs (Systematic Investment Plans) oblige an
individual to save certain portion of earnings. The financial assets can assert great attraction as
the investment in financial assets does not require large amounts of money at once unlike
physical assets. A good portfolio can help investor to earn good returns, the salaried class in
Jammu & Kashmir, however, are reserved with their preference for financial assets.

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Kumar Manish, Study of tax saving instruments awareness and perception of

individual assesses in Delhi, Faridabad, 2019.. The purpose of the study is to learn about the
factors effecting selection of tax saving instruments by individual assessees in Delhi. To assess
the level of awareness an individual assessees has towards tax saving instruments available as per
The Income tax laws. The study also tries to identify the most appropriate and prevalent tax
saving instruments used by individual assesses to reduce their tax liability. The research will try
to assess relation between the demographic profile of the individual and tax saving instruments
adopted by them newline.
Preeti kalgutkar (2018), Tax awareness and tax planning on wealth creation of
individual Assesses, Journal of Management 2(1), 11-23, 2018. This research paper is related
to personal financial aspects of individual assesses. As every individual assesses who have
earned yearly income which is more than a limit as prescribed by the income tax law is liable to
pay tax. Tax planning does not mean skipping the payment of income tax it is just efficient
allocation of earned income in different tax saving investment to acquire max benefit by
individual assesses. The objective of this paper is to study the relationship between tax
awareness and planning on wealth creation of individual assesses in the form of different
investment which is prescribed by income tax laws.
Benny Bitto (2018), A Study on Tax Awareness and Planning Measures adopted by
the Salaried Class in Bangalore City, Vol. 9, Issue 1, June 2018. This researcher generally
focuses on the study of tax planning and awareness class. The study has a crucial role in the
modern economy. As the citizen of the country individual is liable to pay tax for the
development of the country. The reviewed article point out the importance of tax planning
measures and the awareness among the individual.
Prof. Uma Durgude, Prof. Hemant Malviya (2017), Financial Planning for salaried
Employee and Strategies for Tax Savings, Vol 02, Special Issue 03, 2017. The word Tax is
derives from the Latin word called “Taxove” and “Taxo” means to estimate appreciate or value.

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The word income tax itself implies it is a tax on earnings. It plays vital role in the national
economy. The ever increasing function of the government have naturally lead to increasing
expenditure for instance achieving the social and economic objective laid down in the
constitution reducing the inequality of income, removing the concentration of economic power in
few hands balancing regional economic growth and so on.
K. Saravanan, K. Muthu Lakshimi (2017), Tax Saving Scheme and Tax Saving
Instruments of income Tax in India (A.Y 2017-18 & 2018-19), Vol 5, Issue 07, January 2017.
This is done by legitimately taking advantage of all tax exemptions, tax saving scheme,
deductions under chapter VI A, rebates and allowances while ensuring that your investments are
in line with their long-term goals. The purpose of the study is to find out the most suitable and
popularly tax saving scheme and tax saving instrument used to save tax and also examine the
amount saved by using that instrument.
V. Pallavi, P. S. Anuradha (2017), Tax Planning and Investment pattern of

academicians: A Study of Educational Institutions in Bangalore, Journal Taxation 4(2),
112-126, 2017. This research paper aims at studying the investment pattern and the awareness of
various tax planning schemes available for investment for academicians. The study revealed that
the level of awareness among the academicians on various tax saving schemes is low and
personal factors influence the investment decisions.
Manjur Alam (2017), Tax Planning awareness and Techniques adopted by Salaried
Assesses(Having house property income), International Journal of Research in Social
Sciences 7(1), 425-437, 2017. Tax awareness is essential part of the tax planning for the
individual assesses. Income tax takes away major chunk of hard earning money of an assesses.
The objectives of tax planning are to reduce the tax liability to the minimum. That is why in tax
planning done in a haphazard manner. Furthermore, the study helps find if the assesses are aware
of the various tax provisions that are available to them and whether they have made use of them
efficiently in order to plan their taxes efficiently.

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Mr. Bhuvanesh K, Ms. Nandhini R. M (2017), A Study on Tax Planning of Salaried

People in Coimbatore City, Vol 7, Issue 12, Dec 2017. This research paper indicates that the
tax planning is much more than supplies opting for the investment or financial route that offer the
maximum tax breaks. It also does not entail making unnecessary expenditure or needless
investment solely for reducing taxes. Good tax planning remains integrated and interlinked to a
wider exercise that brings stability to financial goals. Apart from ensuring lower than normal tax
liability, the exercise requires considering other factors. Tax planning of salaried people insists
that proper planning of tax deductions to reduce their tax burden legally. So this study is
exploratory research was the data is collected from the primary and secondary source and also it
analyses the way the individual can exempt from tax liability.
Dey Sanjeeb Kumar (2015), Awareness and Practices of tax planning by salaries
employees: A case study of lecturers in Odisha, Vol 15, Issue 2, June 2015. Tax is
compulsory extraction and major source of revenue for the government tax planning is important
for every assesses to reduce their tax liability and compliance with the income tax rules. Salaried
assesses has no exception to it. It is found that more than 60% of the lectures do not have sound
ideas about various provisions of tax.

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Chapter 3
METHODOLOGY

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3.1 RESEARCH DESIGN: DESCRIPTIVE DESIGN
Descriptive design refers to research questions, design of the study, and data analysis for
the study. Descriptive research includes surveys, findings and enquiry. Descriptive research
method can be used in multiple ways and for various reasons. This design can be identified by
characteristics, data trends, conduct comparisons, validate existing conditions and conduct
research at different time periods.
3.2 RESEARCH PROCESS
Target Respondents: Salaried Employees
Population: Infinity
Sample Size: 100
3.3 SAMPLING TECHNIQUE
The sampling method used for the research is Probability Sampling method because the
population is infinite. The sampling technique selected for the study is Simple Random Sampling
Technique. In this technique, the respondents are selected from the total population. Random
sampling has an equal chance of being selected out of population. The sampling will be collected
by simple random sampling method.
3.4 DATA COLLECTION METHODS
3.4.1 Primary Data
The primary data has collected for the study was through questionnaire.
3.4.2 Secondary Data
The secondary data refers to the information gathered by sources of already existing.

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Websites, Books, Old projects, Journals, etc.
3.5 TOOLS FOR ANALYSIS
3.5.1 PERCENTAGE ANALYSIS
Percentage refer is a special kind ratio. Percentage is used in making comparison between
two or more series of data. They are used describe relationship. More over percentage can be
use to compare the relative term of the distribution of two or more series of data.
Number of respondents
Percentage = ∗ 100
Total number of
Samples
3.5.2 CHI-SQUARE
Chi-square is a non parametric technique; it is most commonly used for a research to test
the analysis. The main objective of chi-square is to determine whether significant difference exist
among group of data. The chi-square test provides a method testing the association between the
row and column in a two way table.
A chi-square test, also written as χ2 test, is a statistical hypothesis test there may be
situation in which it is not possible to make any rigid assumption about distribution of the
population from which samples being drawn. This limitation has led to the development of a
group of alternative technique known as a non parametric test. Chi-square describes the
magnitude of the discrepancy between theory and observation.
The Chi-Square is denoted by χ2 and the formula is:
χ2 = ∑ (O − E)2 / E

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3.5.3 WEIGHTED AVERAGE
Weighted average can be defined as an average whose components aggregate of the products are
divided by the total of weights. One of the imitations of simple arithmetic mean is that it gives
equal importance to all the items of the distribution.
Formula: Y=∑ (W*X)/∑W
3.5.4 CORRELATION
A correlation is a statistical measure of the relationship between two variables. The measure is
best used in variables that demonstrate a linear relationship between each other. The fit of the
data can be visually represented in a scatter plot. Using a scatter plot, we can generally assess the
relationship between the variables and determine whether they are correlated or not
. The correlation coefficient is a value that indicates the strength of the relationship between
variables. The coefficient can take any values from -1 to 1. The interpretations of the values are:
 -1: Perfect negative correlation. The variables tend to move in opposite directions (i.e.,
when one variable increases, the other variable decreases).
 0: No correlation. The variables do not have a relationship with each other.
 1: Perfect positive correlation. The variables tend to move in the same direction (i.e.,
when one variable increases, the other variable also increases)

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Chapter 4
DATA ANALYSIS AND INTERPRETATION

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4.1 PERCENTAGE ANALYSIS
TABLE-4.1.1
GENDER OF THE RESPONDENTS
Gender
Frequency Percent Valid Percent Cumulative Percent
Valid Female 60 60.0 60.0 60.0
Male 40 40.0 40.0 100.0
Total 100 100.0 100.0
SOURCE: Primary Data
INFERENCE: From the above table 60% respondents are female and 40% respondents are male.
CHART-4.1.1

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TABLE-4.1.2
AGE OF THE RESPONDENTS
Age
Cumulative
Frequency Percent Valid Percent Percent
Valid 21 - 30 61 61.0 61.0 61.0
31 - 35 15 15.0 15.0 76.0
36 - 40 14 14.0 14.0 90.0
Above 40 10 10.0 10.0 100.0
Total 100 100.0 100.0
INFERENCE: From the above table 61% of the respondents are in between the age 21-30 and
15% of the respondents are 31-35 and 14% of respondents are 36-40 and 10% are above 40 ages.
CHART-4.1.2

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TABLE-4.1.3
MARITALA STATUS OF THE RESPONDENTS
Marital Status
Cumulative
Valid Married 47 47.0 47.0 47.0
Single 53 53.0 53.0 100.0
Total 100 100.0 100.0
INFERENCE: From the above table 53% are singles and 47%are married people.
CHART-4.1.3

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TABLE-4.1.4
TYPE OF EMPLOYEMENT OF THE RESPONDENTS
Type of Employment
Cumulative
Valid Government 27 27.0 27.0 27.0
Private 73 73.0 73.0 100.0
Total 100 100.0 100.0
INFERENCE: From the above table 27% are government sector and 73% are private sector
employees.
CHART-4.1.4

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TABLE-4.1.5
OCCUPATION OF THE RESPONDENTS
Occupation
Cumulative
Valid Teacher 13 13.0 13.0 13.0
Lawyer 5 5.0 5.0 5.0
Doctor 2 2.0 2.0 2.0
Engineer 23 23.0 23.0 23.0
Banker 15 15.0 15.0 15.0
Others 57 57.0 57.0 100.0
Total 100.0 100.0 100.0
INFERENCE: From the above table 13% are teachers, 5% are lawyers , 2% are doctors, 23%
are engineers and 15% are bankers and 57% are others.
CHART-4.1.5

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TABLE-4.1.6
INCOME SLAB (ANNUALLY) OF THE RESPONDENTS
Your income slab (Annually)
Cumulative
Valid 2,50,001 - 5,00,000 34 34.0 34.0 34.0
5,00,001 - 10,00,000 11 11.0 11.0 45.0
Above 10,00,000 1 1.0 1.0 46.0
Below 2,50,000 54 54.0 54.0 100.0
Total 100 100.0 100.0
INFERENCE: From the above table 54% of respondents below 2,50,000 and 34% are 2,50,001-
5,00,000 and 11% are 5,00,001-10,00,000 and 1% are above 10,00,000.
CHART-4.1.6

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TABLE-4.1.7
HOW MUCH OF INCOME IN A INVESTMENT ANNUALLY OF THE RESPONDENTS
How much of your income in a investment annually?
Cumulative
Valid 10% - 20% 31 31.0 31.0 31.0
20% - 30% 22 22.0 22.0 53.0
30% - 40% 11 11.0 11.0 64.0
Above 40% 2 2.0 2.0 66.0
Upto 10% 34 34.0 34.0 100.0
Total 100 100.0 100.0
INFERENCE: From the above table 34 respondents are upto 10% and 31 respondents are 10 %
to 20% and 22 respondents are 20% to 30% and 11 respondents are 30% to 40% and 2
respondents are above 40%.
CHART-4.1.7

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TABLE-4.1.8
HOW MUCH RETURN DO YOU GET FROM YOUR INVESMTENT
How much return do you get from your investment?
Cumulative
Valid 10% - 20% 29 29.0 29.0 29.0
20% - 30% 8 8.0 8.0 37.0
30% - 40% 5 5.0 5.0 42.0
Above 40% 1 1.0 1.0 43.0
Upto 10% 57 57.0 57.0 100.0
Total 100 100.0 100.0
INFERENCE: From the above table 57 respondents are upto 10% and 29 respondents are 10 %
to 20% and 8 respondents are 20% to 30% and 5 respondents are 30% to 40% and 1 respondents
are above 40%.
CHART-4.1.8

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TABLE-4.1.9
IN WHICH AREA DO YOU SPEND MORE ON YOUR MONTHLY INCOME OF THE

RESPONDENTS
In which area do you spend more on your monthly income?
Cumulative
Valid All the above 1 1.0 1.0 1.0
EMI 1 1.0 1.0 2.0
Investment 35 35.0 35.0 37.0
Necessary expenses 1 1.0 1.0 38.0
Nil 1 1.0 1.0 39.0
Savings 51 51.0 51.0 90.0
Shopping 10 10.0 10.0 100.0
Total 100 100.0 100.0
INFERENCE: From the above table 51% respondents are savings and 35% are investment and
10% are shopping and 1% is all the above and 3% are others.
CHART-4.1.9

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TABLE-4.1.10
WHERE DO YOU GET INVESTMENT INFORMATION OF THE RESPONDENTS
Where do you get investment information?
Cumulative
Valid Ads 2 2.0 2.0 2.0
Consultants 11 11.0 11.0 13.0
Friends/Relatives 34 34.0 34.0 47.0
Internet 40 40.0 40.0 87.0
Newspaper 7 7.0 7.0 94.0
Tv 6 6.0 6.0 100.0
Total 100 100.0 100.0
INFERENCE: From the above table 6% are TV and 2% are Ads and 11% are consultants and
34% are friends/relatives and 40% are Internet and 7% are Newspaper.
CHART-4.1.10

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TABLE-4.1.11
HOW DO YOU INVEST YOUR SAVINGS OF THE RESPONENTS
How do you invest your savings?
Cumulative
Valid I don't have any of these

2 2.0 2.0 2.0
invesment
Mutual Fund and other

14 14.0 14.0 16.0
investment schemes
Precious medals 12 12.0 12.0 28.0
Real Estate 8 8.0 8.0 36.0
Savings Bank 60 60.0 60.0 96.0
Share,bonds,etc 4 4.0 4.0 100.0
Total 100 100.0 100.0
INFERENCE: From the above table 60% of respondents are savings bank and 14% are mutual
fund and other investment schemes and 12% are precious medals and 8% are real estate and 4%
are share,bonds,etc. and 2% are I don't have any of these investment.
CHART-4.1.11

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TABLE-4.1.12
HOW DO YOU SAVE FROM YOUR REGULAR INCOME OF THE RESPONDENTS
How do you save from your regular income?
Cumulative
Valid Do not save regularly as

expenses generally exceed 6 6.0 6.0 6.0
income
Save as per planned

29 29.0 29.0 35.0
schedule
Save something every

34 34.0 34.0 69.0
month
Save whatever is left after

31 31.0 31.0 100.0
meeting expenses
Total 100 100.0 100.0
SOURCE- Primary Data
INFERENCE: From the above table 29% of the respondents are save as per planned schedule
and 34% are save something every month and 31% are save whatever is left after meeting
expenses and 6% are Do not save regularly as expenses generally exceed income.
CHART-4.1.12

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TABLE-4.1.13
I CONSULT THE FOLLOWING WHEN TAKING MY FINANCIAL DECISION OF

THE RESPONDENTS
I consult the following when taking my financial decision
Cumulative
Valid I consult my family 44 44.0 44.0 44.0
I consult my financial agent 3 3.0 3.0 47.0
I consult my friends/relatives 18 18.0 18.0 65.0
I take financial decision

35 35.0 35.0 100.0
entirely on my own
Total 100 100.0 100.0
INFERENCE: From the above table 35% of respondents are I take financial decision entirely on
my own and 44% are I consult with my family and 3% are I consult with my financial agent and
18% are In consult my friend's/relatives.
CHART-4.1.13

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TABLE-4.1.14
DO YOU FULLY ULITIZE INCOME TAX BENEFITS EG. DEDUCTION FROM

SALARY/INCOME REBATED,ETC.,
Do you fully utilize income tax benefits eg. deduction from salary/income,
rebated, etc.,
Cumulative
Valid No 35 35.0 35.0 35.0
Yes 65 65.0 65.0 100.0
Total 100 100.0 100.0
INFERENCE: From the above table 65% of respondents are say yes and 35% are say no.
CHART-4.1.14

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TABLE-4.1.15
WHEN DO YOU FORMULATE YOUR TAX PLAN DURING A FINANCIAL YEAR OF

THE RESPONDENTS
When do you formulate your tax plan during a financial year?
Cumulative
Valid At any time 41 41.0 41.0 41.0
Beginning of the year 15 15.0 15.0 56.0
End of the year 17 17.0 17.0 73.0
No planning at all 27 27.0 27.0 100.0
Total 100 100.0 100.0
INFERENCE: From the above table 15% are beginning of the year and 17% are end of the year
and 41% are at any time and 27% are no planning at all.
CHART-4.1.15

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TABLE-4.1.16
DO YOU KNOW ABOUT TAX SAVING STRATEGIES UNDER THE INCOME TAX
ACT OF THE RESPONDENTS
Do you know about tax saving strategies under the income tax act?
Cumulative
Valid No 27 27.0 27.0 27.0
Yes 73 73.0 73.0 100.0
Total 100 100.0 100.0
INFERENCE: From the above table 73% of respondents are say yes and 27% are say no.
CHART-4.1.16

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4.2 CHI-SQUARE TEST
PATTERN OF FINANACIAL PLANNING BY SALARIED EMPLOYEES
HYPOTHESIS
NULL HYPOTHESIS (Ho): There is no association difference between the Pattern of

investment in salaried employees and Gender.
ALTERNATE HYPOTHEIS (H1): There is association difference between the Pattern of

investment in salaried employees and Gender.
Chi-Square Tests
Asymp. Sig. (2-

Value df sided)
Pearson Chi-Square
68.576a 68 .458
Likelihood Ratio
92.105 68 .027
N of Valid Cases
100
a. 137 cells (99.3%) have expected count less than 5. The minimum expected count is .40.
Calculated value 0.458

Tabulated value 0.05
Calculated value >tabulated value
Therefore, null hypothesis is accepted.
INFERENCE: From the above table the value of P is greater than 0.05 . It is insignificant and
therefore null hypothesis is accepted. There is no association difference between the gender and
pattern of investment.

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.4.3 WEIGHTED AVERAGE
FACTOR INFLUENCING SALARIED INDIVIDUAL FINANCIAL PLANNING
Factors Rating (W * X ) Rank

Y 
Strongly Agree Neutral Disagree Strongly W
Agree Disagree
Higher X5=7 X4=42 X3=35 X2=11 X1=5 335/15= 5

return
W5=5 W4=4 W3=3 W2=2 W1=1 22.33
X5*W5= X4*W4 X3*W3 X2*W2= X1*W1=5

=168 =105 22
35
Safety X5=7 X4=43 X3=39 X2=9 X1=2 344/15= 3
W5=5 W4=4 W3=3 W2=2 W1=1 22.93
X5*W5= X4*W4 X3*W3 X2*W2= X1*W1=2

= =
35 18
172 117
Liquidity X5=4 X4=39 X3=47 X2=9 X1=1 336/15= 4
W5=5 W4=4 W3=3 W2=2 W1=1 22.4
X5*W5= X4*W4 X3*W3 X2*W2= X1*W1=1

= =
20 18
156 141
Tax Benefits X5=19 X4=32 X3=33 X2=9 X1=7 347/15= 2
W5=5 W4=4 W3=3 W2=2 W1=1 23.13
X5*W5= X4*W4 X3*W3 X2*W2= X1*W1=7

= =
95 18
128 99
X5=6 X4=32 X3=45 X2=12 X1=5 322/15= 7

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Inflation W5=5 W4=4 W3=3 W2=2 W1=1 21.47
X5*W5= X4*W4 X3*W3 X2*W2= X1*W1=5

= =135
30 24
128
Appreciation X5=5 X4=26 X3=49 X2=15 X1=5 311/15= 9
W5=5 W4=4 W3=3 W2=2 W1=1 20.73
X5*W5=2 X4*W4 X3*W3 X2*W2= X1*W1=5

5 = =
30
104 147
Risk Covered X5=8 X4=35 X3=34 X2=15 X1=8 320/15= 8
W5=5 W4=4 W3=3 W2=2 W1=1 21.33
X5*W5= X4*W4 X3*W3 X2*W2= X1*W1=8

= =
40 30
140 102
Regular X5=17 X4=25 X3=31 X2=24 X1=3 329/15= 6

income
W5=5 W4=4 W3=3 W2=2 W1=1 21.93
X5*W5= X4*W4 X3*W3 X2*W2= X1*W1=3

= = 48
85
100 93
Expert X5=12 X4=42 X3=37 X2=5 X1=4 353/15= 1

Advice
W5=5 W4=4 W3=3 W2=2 W1=1 23.53
X5*W5= X4*W4 X3*W3 X2*W2= X1*W1=4

= =111
60 10
168
INFERENCE: Weighted average for expert advice is weighted highly for salaried individuals
for investment and financial planning.

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4.4 CORRELATION ANALYSIS
4.4.1 CORRELATION TEST (1)
To find the relationship between the age and awareness level regarding the tax savings
investment in salaried employees under the income tax act.
Hypotheses
NULL HYPOTHESIS (Ho) : There is no relationship between the age and awareness regarding
the tax savings investment strategies.
ALTERNATE HYPOTHESIS (H1) : There is relationship between the age and awareness
regarding the tax savings investment strategies.
TABLE - 4.4.1
Correlations
Awareness Awareness
Awareness regarding regarding
regarding various tax various tax
various tax deduction deduction
deduction under under the under the
the income tax income tax act income tax
act [National [Public act [Interest
Saving Provident Fund on housing
Age Certificate] (PPF)] loan]
Age Pearson Correlation 1 .002 .236* .281**
Sig. (2-tailed) .983 .018 .050
N 100 100 100 100
Awareness regarding Pearson Correlation .002 1 .485** .264**

various tax deduction
Sig. (2-tailed) .983 .000 .008
under the income tax act

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[National Saving N
100 100 100 100
Certificate]
Awareness regarding Pearson Correlation .236* .485** 1 .619**

Sig. (2-tailed) .018 .000 .000
[Public Provident Fund
N
100 100 100 100
(PPF)]
Awareness regarding Pearson Correlation .281** .264** .619** 1

under the income tax act Sig. (2-tailed) .050 .008 .000
[Interest on housing loan]

N 100 100 100 100
**. Correlation is significant at the 0.01 level (2-tailed).
INFERENCE:
PPF - The significant value 0.018>0.01. So Ho is accept and H1 is reject. Hence, there is no
relationship between the age and awareness regarding the tax savings investment strategies.
NSC - The significant value 0.983>0.01. So Ho is accept and H1 is reject. Hence, there is no
relationship between the age and awareness regarding the tax savings investment strategies.
HOUSING LOAN - The significant value 0.050>0.01. So Ho is accept and H1 is reject. Hence,
there is no relationship between the age and awareness regarding the tax savings investment
strategies.

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4.4.2 CORRELAITON TEST (2)
To find the relationship between the where do you get investment information and
awareness level of tax savings investment in salaried employees under the income tax act.
NULL HYPOTHESIS (H0): There is no relationship between the where do you get investment
information and awareness regarding the tax savings investment strategies.
ALTERNATE HYPOTHESIS (H1): There is a relationship between the where do you get
investment information and awareness regarding the tax savings investment strategies.
TABLE - 4.4.2
Correlations
Awareness Awareness Awareness

regarding regarding regarding
various tax various tax various tax
deduction deduction deduction
under the under the under the
Where do you income tax income tax act income tax act
get act [Interest [Public [National
investment on housing Provident Fund Saving
information loan] (PPF)] Certificate]
Where do you get Pearson Correlation 1 -.182 -.152 -.066

investment information
Sig. (2-tailed) .070 .131 .513
N 100 100 100 100
Awareness regarding Pearson Correlation -.182 1 .619** .264**

Sig. (2-tailed) .070 .000 .008
[Interest on housing
N
100 100 100 100
loan]

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Awareness regarding Pearson Correlation -.152 .619** 1 .485**

Sig. (2-tailed) .131 .000 .000
[Public Provident Fund
N
100 100 100 100
(PPF)]
Awareness regarding Pearson Correlation -.066 .264** .485** 1

under the income tax act Sig. (2-tailed) .513 .008 .000
[National Saving
N 100 100 100 100
Certificate]
**. Correlation is significant at the 0.01 level (2-tailed).
INFERENCE:
PPF - The significant value 0.70>0.01. So Ho is accept and H1 is reject. There is no
relationship between the where do you get investment information and awareness regarding the
tax savings investment strategies.
NSC - The significant value 0.131>0.01.So Ho is accept and H1 is reject. There is no

relationship between the where do you get investment information and awareness regarding the
tax savings investment strategies.
HOUSING LOAN - The significant value 0.513>0.01. So Ho is accept and H1 is reject. There
is no relationship between the where do you get investment information and awareness regarding
the tax savings investment strategies.

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CHAPTER 5
SUMMARY

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5.1 FINDINGS
 From the study we know that study on financial planning for salaried employees and
strategies for tax savings analyzed by using percentage analysis, correlation, chi-square and
weighted average .
 From the study the out of 100 respondents, 60% of the respondents are Female and 40% of
the respondents are Male. Therefore the majority of the respondents are female.
 From the study 61% of the respondents are in between the age 21-30 and 15% of the
respondents are 31-35 and 14% of respondents are 36-40 and 10% are above 40 ages.
 From the study 53% are singles and 47%are married people.
 From the study 27% are government sector and 73% are private sector employees.
 From the study that 13% are teachers, 5% are lawyers , 2% are doctors, 23% are engineers
and 15% are bankers and 57% are others.
 From the study that income slab (annually) 54% of respondents below 2,50,000 and 34% are
2,50,001-5,00,000 and 11% are 5,00,001-10,00,000 and 1% are above 10,00,000.
 From the study that income in a investment annually, 34 respondents are upto 10% and 31
respondents are 10 % to 20% and 22 respondents are 20% to 30% and 11 respondents are
30% to 40% and 2 respondents are above 40%.
 From the study that return to get from your investment, 57 respondents are upto 10% and 29
respondents are 10 % to 20% and 8 respondents are 20% to 30% and 5 respondents are 30%
to 40% and 1 respondents are above 40%.
 From the study that in which area do you spend more on your monthly income 51%
respondents are savings and 35% are investment and 10% are shopping and 1% is all the
above and 3% are others.

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48
 From the study that where do you get investment information, 6% are TV and 2% are Ads
and 11% are consultants and 34% are friends/relatives and 40% are Internet and 7% are
Newspaper.
 From the study that invest you savings, 60% of respondents are savings bank and 14% are
mutual fund and other investment schemes and 12% are precious medals and 8% are real
estate and 4% are share,bonds,etc. and 2% are I don't have any of these investment.
 From the study that how do you save from your regular income, 29% of the respondents are
save as per planned schedule and 34% are save something every month and 31% are save
whatever is left after meeting expenses and 6% are Do not save regularly as expenses
generally exceed income.
 From the study that consult with taking my financial decision, 35% of respondents are I take
financial decision entirely on my own and 44% are I consult with my family and 3% are I
consult with my financial agent and 18% are In consult my friend's/relatives.
 From the study that do you fully utilize income tax benefits, 65% of respondents are say yes
and 35% are say no.
 From the study that when do you formulate your tax plans, 15% are beginning of the year
and 17% are end of the year and 41% are at any time and 27% are no planning at all.
 From the study that do you know about tax savings strategies under the income tax act, 73%
of respondents are say yes and 27% are say no.

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49
 In correlation (1) There is no relationship between the age and awareness regarding the tax
savings investment strategies.
 In correlation (2) There is no relationship between the where do you get investment
information and awareness regarding the tax savings investment strategies.
 Chi square test shows that no association between the gender and pattern of investment. Ho
is accepted and H1 is rejected.
 Weighted average for expert advice is weighted highly for salaried individuals for investment
and financial planning.
5.2 SUGGESTION
 The research suggest that all working people have an investment plan and invest for their
future use also.
 Employers have awareness for savings and know how to use it.
 Investment planning make arrangement for any emergency situations.
 Apart from professionals like Doctors, lawyers, businessmen, every employee make a
investment and earn tax savings.
 Opinion of tax consultants, industrialists in respect of tax planning options offered for
various categories are helpful.

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50
5.3 CONCLUSON
From the research it can concluded that investment pattern and factor influencing the
salaried individual for their investment decision and to awareness of strategies for tax savings
have been examined and found that there is less similarity among the sample salaried individual
is assigning the ranks to the factors influencing the salaried individual for their investment
decision. It is understood that the performance has been given to tax benefit while investing and
financial planning they use to take expert advice. While examining the investment pattern LIC,
Bank deposits, etc. Through this is study it also prove that there is no single rule of prefacing
investment but as per goal and objectives salaried individual craft their decision. According to
they plan their tax saving strategies it also that good investment together with good tax planning
on the other tax planning requires multiple perspectives and planning your tax has an impact on
your personal finance.
Tax planning reduce not only the tax burden if the salaried assesses adopt tax planning
measures it will help them to save a considerable amount of their hard earned money in a legal
way. When the government has given a wide chance of investing money according to the assess
financial condition is the prime duty of every salaried assesses to utilize his/her chances. What is
required is knowledge of a few sections of the income tax act. Thus, tax planning is not at all
complicated and would be done with certain degree of awareness and application.
Finally successful tax planning stats by understanding the rules of the tax act. It is
concluded the that salaried employees are reducing the tax liability.

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ANNEXURE
QUESTIONNAIRE
A STUDY ON FINANCIAL PLANNING FOR SALARIED EMPLOYEES

AND STRATEGIES FOR TAX SAVINGS
1. Name:
2. Gender: a) Male b) Female c) Other
3. Age: a) 21 - 30 b) 31 - 35 c) 36 - 40 d) above 40
4. Marital Status: a) Single b) Married
5. Types of Employment: a) Government b) Private
6. Occupation: a)Teacher b) Lawyer c) Doctor d) Engineer e ) Banker f) Others
7. Your income slab(Annually): a) below 250000 b) 250001 - 500000 c) 500001 - 1000000 d)

above 1000000
8. What types of investment do you suggest?

a) Fixed deposit Bonds b) Life insurance c) Mutual fund d) Stock/share e) Pension fund
f) PPF g) Provident fund h) Real estate i) Medical Insurance j) Gold,silver and other
precious metals k) Others
9. How much of your income in a investment annually?
a) Up to 10% b) 10- 20% c) 20- 30% d) 30- 40% e) above 40%
10. How much return do you get from your investment ?
a) Up to 10% b) 10- 20% c) 20- 30% d) 30- 40% e) above 40%

lOMoARcPSD|24846787
11. In which area do you spend more on your monthly income?
a) Shopping b) Investment c) Savings d) All of the above
12. Where do you get investment information?
a) TV b) Internet c) Newspaper d) Ads e) Friends/relatives f) Consultants g) Others
13. How do you invest your savings?
a) Saving Banks b) Share, bonds,etc c) Precious Metals d) Mutual fund and other
investment schemes e) Real Estate f) Others g) I don’t have any of these investment
14. How do you save from your regular income?
a) Save as per planned schedule b) Save something every month c) Save whatever is left after
meeting expenses d) Do not save regularly as expenses generally exceed income
15. I consult the following when taking my financial decision
a) I take financial decision entirely on my own b) I consult my family c) I consult my

friends/relatives d) I consult my financial agent e) Others
16. What are the influencing factors of salaried individuals for investment & Financial
Planning?
Strongly Disagree Neutral Agree Strongly

disagree Agree
Higher Return
Safety
Liquidity
Tax benefits

lOMoARcPSD|24846787
Inflation
Appreciation
Risk covered
Regular income
Expert Advice
17. Do you fully utilize income tax benefits eg.deductions from salary/income,rebates,etc.,?
a) Yes b) No
18. 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
19. Do you know about tax saving strategies under the income tax act?
a) Yes b) No
20. Awareness regarding various deduction under the income tax act
Statement Not at all Slightly Moderately Very Extremely

aware aware aware Aware aware
Professional Tax
Interest on housing loan
Deduction u/s 80c:
Insurance premium
PPF

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National savings certificate
Post office saving bank

deposit
Mutual fund
PF(Sec 80ccc)
Medical Insurance policy
(Sec 80D)
Loan taken for Higher

education u/s 80 E
Charitable fund (Sec 80G)

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REFERENCES
GS Sumesh, Awareness and perceptions regarding tax planning options among salaried people
(2020).
Prof. Uma Durgude, Prof. Hemant Malviya (2017), Financial Planning for salaried Employee
and Strategies for Tax Savings, Vol 02, Special Issue 03, 2017.
Arora, A. K., & Garg, K. (2019). Awareness and Perception Regarding Tax Saving Instruments
among Teachers of Higher Education. International Journal of Recent Technology and
Engineering, 3, 2277–3878. https://doi.org/10.35940/ijrte.C5847.098319
Siddhaarth Dhongde, Vilas Epper, Tax Saving Investment Strategies among Salaried Individuals
in Aurangabad City (2020).
Arora, monika (Research Scholar, I. P. T. U. (2019). April Month Milestone. Pacific business
review international, 136/2017-2(Monthly), NA. http://www.pbr.co.in/2017/april4.aspx
Govinda Rao .M. and Kavitha Rao, R. 2005. Trends and issues in Tax Policy and Reform in India.
Working Paper, National Institute of Public Finance and Policy, New Delhi,.
Katdare, N.G.(September 2015).Indian tax structure- an analytical perspective. Research Gate, 5.
Dr. H.C. Methotora and S.P.Goyal, Income Tax Law and Practice with Tax Planning Sathiys
Bhavan Publications, Agra
Jhamb, K. S. (2018). Analytical study on growth and performance of income tax revenue in india.
International Research Journal of Commerce Arts and Science.
Saravanan, K., & MuthuLakshmi, D. K. (2017). Tax Saving Instruments of Income Tax in India:
A Study on Tax Assessee in Trichy City. International Journal of Trend in Scientific Research
and Development, Volume-1(Issue-5), 1259–1266. https://doi.org/10.31142/ijtsrd2469.

A Study of Financial Planning

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a study of financial planning

Bachleor of commerce (Bharathidasan University)

Studocu is not sponsored or endorsed by any college or university

A STUDY ON FINANCIAL PLANNING

JERUSALEM COLLEGE OF ENGINEERING

(An Autonomous Institution, Affiliated to Anna University)

A SUMMER PROJECT REPORT

DEPARTMENT OF MANAGEMENT STUDIES

In partial fulfillment of the requirements for

the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

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I, R. JANANI (Reg. No. 130719631020) a bonafide student of Department of

Place: CHENNAI (R. JANANI)

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CHAPTER TITLE PAGE

LIST OF TABLES vii

LIST OF CHARTS viii

1.1 INTRODUCTION OF THE STUDY 2

1.2 GENERAL PROFILE 3

1.2.1 WHAT IS FINANCIAL PLANNING? 3

1.2.2 OBJECTIVES OF FINANCIAL PLANNING 3

1.2.3 IMPORTANCE OF FINANCIAL PLANNING 3

1.2.4 FINANCIAL PLANNING FOR BEGINNERS 4

1.2.5 FINANCIAL PLANNING PROCESS 4

1.2.6 ADVANTAGES OF FINANCIAL PLANNING 5

1.2.7 INVESTMENTS PLANS FOR SALARIED 5

1.2.9 CONCEPT OF TAX PLANNING 8

1.2.10 INCOME SLAB AND TAX RATES FOR FY 10

1.2.11 STRATEGIES FOR TAX SAVINGS 10

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1.3 OBJECTIVE OF THE STUDY 11

1.3.1 PRIMARY OBJECTIVE 11

1.3.2 SECONDARY OBJECTIVE 11

1.4 SCOPE OF THE STUDY 12

1.5 NEED OF THE STUDY 12

1.6 LIMITATIONS OF THE STUDY 12

3.1 RESEARCH DESIGN 19

3.2 RESEARCH PROCESS 19

3.3 SAMPLING TECHNIQUES 19

3.4 DATA COLLECTION METHOD 19

3.4.1 PRIMARY DATA 19

3.4.2 SECCONDARY DATA 19

3.5 TOOLS FOR ANALYSIS 20

04 DATA ANALYSIS AND INTERPRETATION 22

4.2 CHI-SQUARE TEST 39

4.3 WEIGHTED AVERAGE 40

4.4 CORRELATION ANALYSIS 42

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S.NO TITLE PAGE

4.1.1 GENDER OF THE RESPONDENTS 23

4.1.2 AGE OF THE RESPONDENTS 24

4.1.3 MARITAL STATUS OF THE RESPONDENTS 25

4.1.4 TYPE OF EMPLOYMENT OF THE RESPONDENTS 26

4.1.5 OCCUPATION OF THE RESPONDENTS 27

4.1.6 INCOME SLAB OF THE RESPONDENTS 28

4.1.7 HOW MUCH OF INCOME IN A INVESTMENT 29

4.1.8 HOW MUCH RETURN DO YOU GET FROM YOUR 30

4.1.9 IN WHICH AREA DO YOU SPEND MORE ON YOUR 31