Abstract:

This project is all about understanding how people in Vadodara district choose to invest their
money, especially when it comes to saving on taxes and to know what kinds of investments
people like, whether they're putting money into things like mutual funds, stocks, or real estate,
and how much they're focusing on tax-saving options like retirement accounts or special savings
schemes.(e.g. ELSS, PPF, NPS etc.)

Primary data will be collected through Survey and questionnaires to figure out investment habits
and preferences of people of Vadodara. And secondary data from banks and financial reports and
other websites to get a broader picture of what's going on.

The project seeks to uncover patterns and trends in how people make these decisions. Are there
certain types of investments that are more popular than others? Do people prioritize saving on
taxes, or are they more focused on growing their wealth? By understanding these patterns, this
study can help individuals to make smarter financial decisions. Whether it's choosing the right
investment strategy or taking advantage of tax-saving opportunities. This research is to contribute
to help to create a more financially resilient society.

Table of contents:

Sr. no Title Page no.

1. Introduction 2

2. Literature Review 3-4

3. Methodology 4-5

4. Expected outcomes 5

5. Timeline 5-6

6. References 6
Introduction:

Investing money wisely is crucial for financial security and growth. Investing money is like
planting seeds for the future, but everyone has different ways of doing it. However, the choices
people make about where to invest can vary widely depending on factors like their financial
goals, risk tolerance, and knowledge about different investment options. Some people want to
grow their money while also saving on taxes. That's where tax-saving products come in. Saving
taxes is a significant consideration for many individuals, as it allows them to keep more of their
hard-earned money while also planning for their future financial needs. This research project
aims to understand investment behavior of people in Vadodara focusing specifically on how
individuals allocate their funds between tax-saving products and other financial products.

Objectives:

1. To analyze investment patterns focusing on tax-saving products and other financial products.

2. To understand the preferences and behavior of individuals regarding tax-saving options versus
other investment options.

3. To identify trends and factors influencing investment decisions.

4. To contribute to the promotion of financial literacy and stability.

By examining the types of tax-saving products favored by individuals, such as equity linked
savings scheme, public provident fund, national pension scheme, and analyzing the distribution
of investments across various financial avenues like stocks, bonds, and real estate, this research
seeks to uncover valuable insights into investment behavior. These insights can help individuals
make more informed decisions about their finances, assist policymakers in designing targeted
financial policies, and enable financial institutions to develop products and services that align
with the preferences and needs of their customers.

In summary, this research aims to provide a comprehensive understanding of investment patterns

at the district level (Vadodara), with a particular focus on tax-saving products and other financial
instruments. By doing so, it seeks to contribute to the promotion of financial literacy, inclusion,
and stability within communities, ultimately empowering individuals to build a stronger financial
future.
Literature review:

1. Vikas Kumar Sonia (2013) in his study on the topic “A Study on Performance of Tax Saving
Schemes in Mutual Fund” found out the schemes selected for the study were highly correlated
with the market index. The five schemes which were selected had a positive Sharpe ratio of
which, ICICI prudential tax plan had the highest Sharpe ratio. Through this, it was analyzed that
adequate returns could be earned by facing a minimum level of risk.

2.Pinal Bardot (2016) in his study on the topic “An Analysis of Investors Attitude towards
Investment Instrument: Insurance as a Tax saving and for Investment” found out that most of the
respondent chose pension plan for investment, the investors chose 5 year fixed deposits as the
most popular tax saving scheme which was followed by Pension plan, PPF, Children’s Education
Plan, Mediclaim policy and finally National Savings Certificate, which were known by only very
few respondents. It was also found out that the majority of the population, which consisted of
middle class were more invested in these tax saving schemes as these schemes had various tax
benefits and risk was minimum. These people would invest in Mediclaim policy and children’s
education only when specific conditions arise.

3.Surbhi Srivastava (2017) in her study on the topic “Equity Linked Saving Schemes (ELSS)
Vis-à-vis Fixed Income Schemes under the Income Tax Act 1961” found out that ELSS funds
were a good option for long term investors where they can create wealth in the long-term
perspective whereas in the short-term perspective, helps in tax aversion. It offers high rate of
returns compared to other traditional avenues for investment. It was also observed that a
combination of investment in ELSS with SIP would give the investor to average the market
fluctuations and those investors who have no or little knowledge can invest in ELSS as they can
maximize their return and avail tax benefits.

4.Ramamurthy and Reddy (2005) conducted a study to analyze recent trends in the MF industry
and draw a conclusion that the main benefits for small investors‟ due to efficient management,
diversification of investment, easy administration, nice return potential, liquidity, transparency,
flexibility, affordability, wide range of choices and a proper regulation governed by SEBI. The
study also analyzed about recent trends in MF industry like various exit and entry policies of MF
companies, various schemes related to real estate, commodity, bullion and precious metals,
entering of banking sector in MF, buying and selling of MF through online.

5. Savita and Lokesh Gautam (2013) in their study on the topic “Income Tax Planning: A Study
of Tax Saving Instruments” found out that the most adopted and accepted tax saving instrument
by the sample unit taken was Life Insurance policy which was further followed by Provident fund
as the second alternative and Tax saving Fixed deposits as the third alternative. The least opted
alternative was Infrastructure bonds. Based on the age group, the people between the age group
of 40-50 & 50-60 saved more part of their income and invested in these tax saving investments
but, on the basis of income groups, those who have more income have more savings and invested
in these investment sources.

Research methodology:

Research design:

• mixed methods research design, combination of qualitative and quantitative approach

Data collection methods:

• primary data through surveys and questionnaire

• Secondary data from various reports, websites and other sources

Data collection period: 5 years

Data analysis techniques:

• Ratios
• Average
• Graphs
• Descriptive statistic
• Trend analysis
• Likert scale method (for questionnaire)

Ethical considerations:
Under this project ethical guidelines are used (This includes obtaining informed consent from
participants, ensuring confidentiality of their information, and maintaining transparency about the
purpose and limitations of the study.)

Limitation of study:

• Limited sample size

• Data accuracy (people may not remember details correctly or might not provide truthful
answers)
• Time constraints

Expected outcomes:
The findings of the study will inform policymakers, financial institutions, and investors, enabling
them to make informed decisions and improved financial outcomes. By examining the utilization
of tax saving products and their impact on investment behaviors, the research will assess the
effectiveness of various tax saving strategies.

The analysis will help evaluate the extent to which tax incentives influence investment decisions
and contribute to overall financial planning. The findings of the study will have practical
implications for multiple stakeholders. Policymakers can use insights to design targeted financial
policies and incentives that promote investment in tax savings products and enhance financial
literacy.

Timeline:
Sr. No. Chapters Tentative Days
1. Introduction 3 days
2. Literature review 6 days
3. Research methodology 5 days
4. Data analysis and interpretations 10 days
5. Conclusions and recommendations 3 days
6. references 1 day
Minimum expected days for completion of the project = 28 days
Maximum expected days for completion of the project = 33 days

References:

• Pinal Barot, Assistant Professor, An Analysis of Investors Attitude towards Investment

Instrument: Insurance as a Tax-savings and for Investment with Special Reference to
India (February 2016).
• Pooja Vinod, investment in tax saving schemes: An overview. International journal of
research in engineering technology Volume 5, issue 6 (2020)
• Dr. A. N. Paunikar, Associate Professor, Equity Linked Saving Schemes as Tax saving
Investment for Salaried Class with Special Reference to India (May 2014).
• Savita and Lokesh Gautam (2013), Income Tax Planning: A Study of Tax Saving
Instruments Volume 2, No. 5, May 2013. Available at:
https://www.academia.edu/5373645/Income_Tax_Planning_A_Study_of_Tax_Saving_In
struments
• Ram (2011), Study of Tax Saving Schemes in Mutual Funds in ICICI Prudential Life
Insurance Co. Ltd.
• Amar Shakti Kumar (2017), A Study of Tax saving schemes in mutual funds in India.
Available at: https://www.slideshare.net/amarshakti94/a-study-of-tax-saving-schemes-in-
mutual-funds-in-india
• Vikas Kumar Sonia (2013), A Study on Performance of Tax Saving Schemes in Mutual
Fund. Available at: https://www.slideshare.net/vikassoni1706/tax-saving-schemes
• Amar Shakti Kumar (2017), A Study of Tax saving schemes in mutual funds in India.
Available at: https://www.slideshare.net/amarshakti94/a-study-of-tax-saving-schemes-in-
mutual-funds-in-india
• Shivani Singh (2022), Top Tax saving investments options availed by young salarised
individuals. IJCRI Volume 10, (issue 3)