A STUDY ON

FINANCIAL PLANNING
AWARENESS
IN SALARIED EMPLOYEES
ABOUT TAX SAVING
INVESTMENTS.

Presented by: -

Mr. Onkar Dhondiram Pise

Roll No- IB2220358
Date:
 Abstract
A financial plan is something that you create after
considering your current salary, savings, expenses, other incomes,
investments if any, financial goals and a vision for your future life.
You then try to choose savings and investment plans accordingly
so that you can meet your long-term and short-term financial
goals at various stages in your lives. Financial planning is
important when it comes to saving taxes and for future returns. It
is imperative for an individual as it helps in maintaining balanced
savings percentage even when the financial markets are constantly
being played between inflation and fluctuation. Tax planning is an
essential part of financial planning. Efficient tax planning with
investments enables us to reduce our tax liability to the minimum.
This is done by legitimately taking advantage of all tax
exemptions, deductions rebates and allowances while ensuring
that your investments are in line with their long-term goals.
The researcher had conducted a survey in order to find out
the financial planning as well as for tax saving awareness in the
salaried individuals. The Survey was done with the help of google
form in Maharashtra in 5 days (21 st August to 25th August). The
Purpose of Study is also to find out how much salaried people are
aware about Financial and Investments planning for tax saving
and popular Tax saving Investment used to save tax.

Keywords: Financial planning, tax planning, Investments,

tax saving instruments.

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 INTRODUCTION

Financial Planning is the process of meeting life goals

through the proper management of finances. Financial planning is
a process that a person goes through to find out where they are
now (financially), determine where they want to be in the future,
and what they are going to do to get there. Financial Planning
provides direction and meaning to persons financial decisions. It
allows understanding of how each financial decision a person
makes affects other areas of their finances. For example, buying a
particular investment product might help to pay off mortgage
faster or it might delay the retirement significantly. By viewing
each financial decision as part of the whole, one can consider its
short and long- term effects on their life goals. Person can also
adapt more easily to life changes and feel more secure that their
goals are on track.
Today, in India financial planning means only investing
money in which plan who give maximum benefits or in Tax saving
instruments. Thanks to the to many of tax exemptions and
Deductions available under various sections and subsections of
the Income Tax Act. This has led to a situation where people
invest money without really understanding the benefits or the
reasoning behind the investments made. In salaried employees
there are really very less awareness about that there are
investments which can be a tax saver and instead of that
investment they invest in the schemes where zero risk and less
benefits. Now a days every individual don’t want to pay any Tax to
the government and want to save their money as much as they
can, so there are lots of investment in which people can
investment and save their money.

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 LITERATURE REVIEW

 ]

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 RESEARECH OBJECTIVE

 To understand financial planning done by salaried

employees and the saving-investment behavior of the
salaried employees.
 To understand the how much salaried employees are aware
about that there are investment plans for tax saving
benefits.
 To gain knowledge about the various investment plans
keeping in mind the significance of tax saving and other
benefits.
 To spread awareness about financial planning among the
salaried employees.
 To find out the most suitable investment instrument for
salaried investors.
 To examine the amount saved by using varies investments
plans provided by governments and private investments
companies.

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 Given below are some of the best tax saving investment opportunities in
India which I found during my research and which is beneficial to the
salaried employees:

Sr. Tax saving Tax Benefits Under Section Total Tax

No. Instruments Deduction

1 Life Insurance Section 80C (Premium & Sec. Up to Rs.

10(D) (Death/Maturity) 1,50,000

2 Health Insurance Section 80D Up to Rs. 55,000

3 Unit Linked 80CCC Up to Rs.

Insurance Plan 1,50,000
(ULIPs)

4 New Pension Section 80CCD Up to Rs.

Scheme (NPS) 1,50,000
Additional Rs.
50,000

5 Equity-linked Section 80C Up to Rs.

Tax Saving 1,50,000
Scheme (ELSS)

6 Public Provident Section 80C Up to Rs.

Fund (PPF) 1,50,000

7 National Saving Section 80C Up to Rs.

Certificate (NSC) 1,50,000

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 RESEARECH METHDOLOGY:
Descriptive research has been conducted with the help of google
questionnaire. This form was provided to more than 200 people
out of which 100 sample were collected on the basis of a non-
probability technique. The data collected has been represented
with the help of numeric chart and pie chart, etc. Data was
collected from different places in Maharashtra.

There is Both the primary sources and secondary sources of data

have been used to conduct the study.
The primary data for this study has been collected by approaching
the salaried employees in varies streams via internet (digital
survey method).
The secondary data are collected from articles published on
various websites relate to investments and income tax related
sides (desk research).

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 DATA ANAYLSIS AND
INTERPRITATION
1. Age of the Respondents:
Age No of respondents Percentages
20 – 30 56 56%
30 – 40 10 10%
40 – 50 11 11%
50 – 60 23 23%
Grand Total 100 100%

Number of
23% respondents
11% 56% 21-30 31-40 41-50
10%
51-60

The majority of respondents were from the age groups of 20- 30,
i.e., 56%, and 50-60, i.e., 23%. These are considered to be the most
active age groups.
The age group of 20-30 is the most dynamic of all age groups. In
this age group, an individual has just begun to start/build a career.
This age group is prone to spending lavishly and can be targeted
for investing and saving. On the other hand, the age group of 50-
60 are thinking about their retirement life and want to invest in
the plan which are given them highest return with minimum risk
and want to save as much money as they can save. And secure
their retirement life.
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 2. Gender distribution of the respondents:

Gender No of respondents Percentages

Female 73 73 %
Male 26 26 %
Grand Total 100 100 %

Gender ratio
26%
males females

74%

From the above figure, we can interpret that, from all the
respondents, 74% are males whereas 26% are females. Hence, we
can say that, the females have started to work shoulder to
shoulder with the males in our developing society.

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 3. Salaries range of the respondents:

Annual Income No of Percentages

respondents
Up to Rs. 2.5 lakh 30 30%
Rs. 2.5-5.0 lakh 21 21%
Rs.5-7.5 lakh 20 20%
Rs. 7.5-10.0 lakh 17 17%
Rs. 10 lakh above 12 12%
100 100%

Annual Income
12% Up to Rs. 2.5 lakh
30%
17% Rs. 2.5-5.0 lakh

Rs.5-7.5 lakh
20% 21%
Rs. 7.5-10.0 lakh

Rs. 10 lakh above

The above figure shows that a major portion of respondents are in

income below 2.5 lakh p.a. i.e., 30%, which indicates that he/she
might be in the beginning phase of their career. With the rest of
the income slabs, the respondents show a stable phase of their
career. The slab of between Rs. 2.5 lakh to Rs.5 lakh p. a., i.e., 21%,
this indicates that the person may be in the mature stage of career .

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 4. Occupational status of the respondents:

Occupational No of Percentages
status respondents
Teachers/Lecturers 30 30 %
Doctors /Engineers 27 27 %
Officers 6 6%
Clerks /others 37 37 %
Grand Total 100 100

Occupations status
30% Teacher/Lecturers
37%
Doctors/Engineers

6% Officers
27%
Clerk/others

Most of the respondents were Clerks/others i.e., 37%, whereas 30%

of respondents were from the category of Teachers/Lecturers.
Respondents belonging to the category of Doctors/Engineers and
officers were 27% and 6% respectively.

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 5. Annual savings of the respondents:

Annual Saving No of Percentages

respondents
Less than Rs. 25,000 35 35 %
Rs. 25,000-50,000 24 24 %
Rs.50,000-1,00,000 19 19 %
More than Rs. 1,00,000 22 22 %
Grand Total 100 100

Annual Saving
22%
35% Less than Rs. 25,000
Rs. 25,000-50,000
19%
Rs. 50,000-1,00,000
24% More than Rs. 1,00,000

From the figure shown above, we can indicate that majority of the
salaried employees have an annual savings of less than Rs. 25,000,
i.e. 35% of the total respondents; and on the contrary 24% of the
total respondents have an annual savings of more than Rs.
1,00,000. It can be said that the reason behind low/decreasing
annual savings can be increasing responsibilities of a middle-class
worker, less income, more spending, debts/loans, lack of
awareness regarding savings and investment, and not to forget
inflation.

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 6. Motivation of Saving from Salary:

Motivation No of Percentages
respondents
For Specific Purpose 55 55 %
For Children Study and 20 20 %
Future
For Retirement Benefits 16 16 %
For Tax Benefits 9 9%
Grand Total 100 100

Motivation for Saving

9%
16% For Specific Purpose

55% For Children Study and Future

20% For Retirement Benefits
For Tax Benefits

The motivation behind saving cannot be known except for the

individual himself. As shown in the figure above, it can be said
that the respondents’ main motivator is to meet specific purpose,
as 55% of respondents have selected this option. These specific
purposes for saving can be personal expenses like buying luxurious
goods, family’s expenses, saving for children’s future, health
expenses, vacations, wedding, etc. Whereas, there are only 9% of
respondents whose motivator for saving is to get tax benefits,
which shows that most of them are not aware about the benefits of
tax saving investments.

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 7. Investment preferences of the respondents:

Investment Preference No of Percentages

respondents
Bank/Fixed Deposits 31 31 %
Share Market/Mutual Funds 30 30 %
Government securities- 26 26 %
P.P.F./P.F./Bounds
Properties/Gold 6 6%
Insurances 7 7%
Grand Total 100 100

7%
Investment
6% Preference
31%
Bank/Fixed Deposits
26% Share Market/Mutual Funds

Government Securities
30%
Properties/Gold

Insurance

It is observed that most of the respondents (i.e., 31%) mostly prefer

to invest in Bank/Fixed Deposit with minimum risk. Now a days
Share market/Mutual Fund Investments are become more popular
and lots of youth are ready to get risk i.e., 30% of respondents.
With the help of Government securities everyone wants to save
their tax and take minimum risk.

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 8. Reason for Investments made:

Reason for Investment No of Percentages

respondents
Future Plan 74 74 %
Buying own House 4 4%
For Specific Reason 13 13 %
For Tax Saving 9 9%
Grand Total 100 100

9%
Reason for
13%
investment
4% Future Plan
74%
Buying Own House
Specific reason
Tax Saving

The Reason behind Investments are lots now a days. As shown in

the figure above, it can be said that the respondents’ main Reason
for investments are now a days are future planning i.e., 74% and
other main reason can be specific purposes which is differed for
every person it can be family’s expenses, saving for children’s
future, health expenses, vacations, wedding, and retirement plan,
etc. Whereas, there are only 9% of respondents whose reason of
Investment is to Save the Tax expenses, which shows that most of
them are not aware about the there are lots of investments for
saving tax expenses.

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 9. Respondent’s awareness of tax saving
investments:
Awareness of Tax saving No of Percentages
Investments respondents
Life Insurance 34 34 %
Health Insurance 8 8%
P.P.F./P.F. 20 20 %
National Pension Scheme 2 2%
Tax Saving schemes 3 3%
Equity Linked Tax Saving 7 7%
Schemes
Know More than 1 of above 26 26 %
Grand Total 100 100

Awareness of tax
saving Investments
Life Insurance
26%
34% Health Insurance
P.P.F./P.F.
7% 3% National Pension Scheme
8% Tax Saving schemes
2%
Equity Linked Tax Saving Schemes
20%
Know More than 1 of above

Insurance policies like mostly life insurance and health insurance

as well as PPF seems to be the most popular, as most of the
respondents are fully aware about these investment instruments.
Whereas, on the contrary, ULIPs, NPS, ELSS and NSC are the least
popular tax-saving investment options as there seems to be lack of
awareness about these options amongst the salaried employees.

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10. Type of investment plan does the
respondents prefer in future:

Return plan prefer on No of Percentages

Investments respondents
Regular Return Plan 35 35 %
Pension plan 12 12 %
Specific purpose plan 12 12 %
Multiple Option plan 41 41 %
Grand Total 100 100

Return plan prefer

on Investments
35% Regular Return Plan
41%
Pension plan
Specific purpose plan
12% Multiple Option plan
12%

From the above figure, we can conclude that most of the

respondents prefer a Multiple Option plan for future investment,
as their main motive for investing might be to get a more return
on investment as they continuously invest. Around 41% people
show interest in this type of plan. The second most investment
plan preferred by the respondents are Regular return plan with
35% of the preference. Pension plan and specific purpose plan are
amongst the least preferred plans for investment, with 12% and
12% equal ratio.

Conclusion
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Tax-saving is only a smart part of a broad category called financial
planning. There is more to a financial plan than what meets the
eye. For a financial plan to be successful, it should have a proper
investment plan that saves taxes and give high returns.
Irrespective of the plan you choose, few things remain constant.
They are:
 Having well-structured short-term and long-term financial
goals at every stage of your lives.
 Starting to save as early as you can, so that it gives you a
long window to stay invested and reap good returns.
 Cutting down unnecessary expenses and saving for a better
future of own and family members.
 Putting aside at least 10 to 15% of savings every month
towards financial or investment plans, to be used at a time
when it is needed the most.
 Talking to a professional in case of any queries or
uncertainty.

At last, we all have to increase our knowledge before investing in

any plan about what kind of returns we get. How much we can
save by investing in any particular plan, there are any other
benefits we can get through those investments.
Think before investing…

RECOMMENDATION
PAGE 17
After all this it can be stated that the fundamental corner stones of
successful investing are:

 Save regularly
 Invest regularly
 Start Early
 Diversify
 Use tax shelter
 Keep a regular check on investment and modify plans as and
when needed
 All the documentations should be complete and need to be
preserved of investments made.
 People need to be educated and informed about Financial
Planning as well as tax saving investments.
 Companies can arrange for seminars and sessions through which
they can provide information to people.
 Investment through SIP should be encouraged.
 Direct dealing with the fund could help the investor with their
financial planning.
 Investor should take the Professional advice from Investment
advisers or Tax consultants before investing.
 Goal should be properly divided into short term, medium term
and long term and investment should be done according to the
goals.
 Regular meetings should be conducted between the financial
planner and client to review the investment portfolio.
 Follow-up, follow-up, follow-up is need of hour and it should be
understood by financial service provider.

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 REFRENCES
 Cleartax (2022, 31, July) Section 80D Deduction-Section
80D -
Income Tax Section 80D for Medical Insurance
Deductions (cleartax.in)

 NPS, National Pension Scheme - ✔️What is NPS

✔️Account Opening ✔️NPS Login ✔️Benefits
✔️Withdrawal (cleartax.in)

 Tax Planning For Salaried Employees | ICICI

Prulife

 https://www.incometax.gov.in/iec/foportal/help/
individual/return-applicable-1#taxdeductions

 https://cleartax.in/s/income-tax-savings

 https://www.aimsjournal.org/

 6 Financial Planning Tips for Salaried Professionals

- Entrepreneurship Life

PAGE 19
THANK
YOU

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