PROJECT REPORT

On
“A study on financial planning for salaried employee
and strategies for tax savings”.

Submitted for the Summer Internship Project Of Master In

Business Administration

Under the guidance of PROF. SUNIL

JHA AH -WORKS (FIN,A/C &
STORE)

BY

LEMANSHU A. TALMALE

Submitted To
DEPARTMENT OF MANAGEMENT SCIENCE & REASERCH
J.M. PATEL COLLEGE, BHANDARA

In partial fulfillment of the requirements for the award of the

degree of

Year 2022-2023

1
2
ACKNOWLEDGEMENT

The successful completion of the project would not have been possible without the
guidance and support of many people. I express my sincere gratitude to Mr. Sunil Jha
Sir a Finance Manager by profession of a Sunflag Iron & Steel Co. Ltd, for allowing to
do my project at Sunflag Iron & Steel Co. Ltd.

I thank the staff of Sunflag Iron & Steel Co. Ltd,, Attibele for their support and
guidance and helping mein completion of the report.

I am thankful to my internal guide Prof. Himanshu Kumar, for his/her constant support
and inspiration throughout the project and invaluable suggestions, guidance and also for
providingvaluable information.

Finally, I express my gratitude towards my parents and family for their continuous
support during the study.

Name : LEMANSHU A. TALMALE

3
 TABLE OF CONTENTS

SL. CONTENTS PAGE

NUMBER NUMBERS

1 Company Profile 04-09

2 Sector Overview
10-12

3 Actual Work Done 13-15

4 15-16
Title of the Project

5 Objectives 16-20

6 21
Research Methodology

7 22-27
Analysis and Interpretation

8
Findings and Suggestions 28-29

9
Conclusion 29

10 Appendices 30

11
Bibliography 30

4
Company Profile

History

Sunflag Iron and steel company is a prestigious unit of the Sun flag
Group incepted in 1989. It has up a state –of- art integrated at Bhandara, India.
The plant has a capacity to produce 2,00,000 tonnes per annum of high quality
special steel using iron ore and non coking coal as basic inputs.
The plant comprises a 1,50,000 tonnes per annum direct reduction plant,
to produce iron for capacitive consumption in the Steel Melting Shop. This shop
comprises a 50/60 tonnes ultra high power electric Are Furance with Eccentric
bottom arrangements. A Ladle auto mould level high controller and
electromagnetic stirrer. The billet produce at the steel melting shop are rolled at
the Mannesmann Demag Designed ultramodern 198 stand Continousmill. This
mill has a walking hearth reheating furnace , quick roll-changing facilities., a 65
metres long walk and wait type various stages.
Within a short period of its inception, Sunflag tell has establish itself as a
major global force This modern complex pulsating within world- class
technology, export human resource and a communications to excellence , has
created a distinct niche in spring steel and attained the position of market leader in
the segments
.Todays Sunflag Steel has also embarked on an export thrust and is regulatory
receiving prestigious order from Japan and many other Far East, Afro- Asian and
Middles-east countries.
The ASM commenced production in the yer1997, enabling Sunflag to
expand its product range upto 90 mm di Rounds; 75mm RCS and upto 120X25
mm flats, Production capacity of rolled product is also enhanced by 60000MT.
per annum. In order to save energy, a captive power plants of 15MW capacity
has already been comissioned using waste gases.
In Sunflaf group was spread its manufacturing operations in6
countries spanning 3 continents .

Name Designation
Pranav Bhardwaj Managing Director
R Muralidhar Executive Director -Finance
Ramchandra Vasant Dalvi Directors- Technical
Ashutosh Mishra Co. Secretary & Compl. Officer
E R C Shekhar Ind. Non-Executive Directors
Kumar jitendra singh Ind. Non-Executive Directors
Ravi bhushan Bhardwaj Ind. Non-Executive Directors
Anand Sadashiv Kapre Ind. Non-Executive Directors
Neelam Kothari Ind. Non-Executive Directors
S Mahadevan Chief Financial Office
Sajiv dhawan Ind. Non-Executive Director
Suhrit Ravi Bhushan Bhardwaj Non Executive Director
5
 Surendra Kumar Gupta Deputy Managing Director
Vinita Bahri Ind. Non-Executive Director

Latest Developments

During the year under review, could see some material change in the top line and
in profitability. Indian Steel industry has been driven by availability of raw
material viz. Iron ore, coal etc. and cost of labour. Consequently, th Financial
Year under review remained volatile during the year. Further, your Company with
continous development of new grades of steel and upgradation of plant and
equipment, could maintain itspresence in the market particularly in automobile
industry. As a result, there was an increase in the sales and profit before tax.
EBIDTA as a percentage to total income for the year was 13.53% as against
10.27% for the previous year.
In order to achieve effective cost reduction and improvement in productivity,
activity of total Productive Maintenance (TPM) continued to be implemented
by the Company during the Financial Year 2020-21 under review.

The Products
The SUNFLAG STEEL is an ISO/TS 16949:2009 and ISO-9001:2008
approved, NABL accreditated AD 2000 Merkblatt WO Certified from TUEV-
NORD, backed up with sound management practices and a highly motivated
team. It is a small wonder the Sunflag products are exported to a number of
countries.

Strips: Used for Shaving Blade.

In sizes from 150x3.5mm (Hot
Rolled) and 140x0.45mm (Cold
Rolled).

6
 Flats: The spring steel that
goes into the automobile and
railway suspension. The
grades include Silico
Maganese, Chrome,
Vanadium steel. In
specifications like: DIN,
SAE/AISI, BS The sizes from
44mm wide to 120mm wide;
and 5mm to 25mm thick.

Rounds & Rounds &

Hexagons: In carbon, spring
and alloy steels. In
specifications like: DIN,
SAE/AISI, BS etc. In sizes
from 15mm to 90mm in
diameter. For the forging,
automobile, spring
industries.

Round Cornered Squares

(RCS): In carbon, free-
cutting and alloy steels. In
specifications like: DIN,
SAE/AISI, BS et cetera. In
sizes from 45x45mm to
90x90mm. For the forging,
automonile industries.

Wire Rods (WRB): In Carbon

stel, spring steel, free cutting

7
 Rebar: Used for construction
purpose.In s

Sunflag Steel caters to the demands of various core sectors industries like
Automobiles, Railways, Defence, Agriculture, Engineering Industry etc.

Spring Steel, Carbon Steel, Alloy Steel, Free Cutting Steel and Ball Bearing Steel.

SISCO produces various part of automobile. Some finished goods of SISCO steel

CORBAN STEEL BALL BEARING STEEL

8
ALLOY STEEL

FREE CUTTING STEEL

Performance of Market share Sunflag Iron share Price Insight

VIEW ALL

 Beating 3 Yr Revenue CAGR

 Company’s annual revenue growth of 43.06% outperformed is
3yr CAGR of 6.38%. (Source Consolidated Financials)
 Stock Returns vs Nifty Smallcap 100
 Employee & Inerest Expense

9
Key Metrics

PE Ratio
1.41
(x)
EPS-TTM
59.36
( ₹)
MCap
1,493.
( ₹ cr.)
12
Sectoral MCap 28
Rank
PB Ratio
0.85
(x)
Div Yield
0.00
(%)
Face Value
10.00
( ₹)
Beta 2.43
VWAP
83.89
( ₹)
52W H/L
( ₹)
136.85/57.10

Sunflag Iron Share Price Returns

1 Day 0.97%
1 Week 4.89%
1 Month -9.32%
3 Month 5.82%
1 Year 0.54%

SWOT Analysis

Sunflag Iron and Steel SWOT Analysis

Opportunities Threats

Strengths Strength Opportunities (SO) Strength Threats (ST) Strategies

Strategies
Leveraging brand recognition in
new segments
Weaknesses Weaknesses Opportunities (WO)
Strategies
Investing into customers oriented
services and supply chain
Investing into R & D thwart
Basic Materials industry
disruptors.
Weaknesses Threats (WT)
Strategies
Get out of the business and focus
on growth areas

10
 Sector Overview

Sector Size

The iron steel industry in India is among the most important industries within the country.
India surpassed Japan as the second largest steel producer in January 2019. As per
worldsteel, India’s crude steel production in 2018 was at 106.5 tonnes (MT), 4,9% increase
from 101.5 MT in 2017, means that India overtook Japan as the world’s second largest
steel production country. Japan produced 104.3 MT in year 2018, decrease of 0.3%
compared to year 2017. Industry produced 82.68 million tons of total finished steel and 9.7
million tons of raw iron. Most of the iron and steel in India is produced from iron ore.

Major players

COMPANY LAST MARKET SALES NET TOTAL

PRIC CAP.(RS. TURNOV PROFIT ASSET
E CR.) ER S
JSW STEEL 631.80 152,718.70 118,820.00 16,702.00 120,044.00
COAL INDIA 212.30 130,834.76 1131.92 11201.57 21933.06
TATA STEEL 99.30 121,276.09 129021.35 33011.18 172,740.62
HINDUSTAN 267.20 112,900.02 29440.00 9630.00 38,362.00
ZINC
VEDANTA 270.05 100382.99 63277.00 9630.00 38362.00

HINDALCO INDS 391.00 87865.52 67277.00 17245.00 118644.00

JINDAL STEEL 428.40 43,701.08 55,264.33 8,283.42 57,635.14
NMDC
NMDC 127.70 37,701.82 25,881.73 9,398.48 39,576.90
SAIL 76.75

APL APOLLO 1,036.45 25,942.34 9,602.40 287.13 2195.08

TUBES
RATANMANI 1889.80 13,247.50 3,138.78 322.39 2,406.53
METALS
NATL 71.30 13,095.24 14,180.81 2,951.97 13,336.66
ALUMINIUM

Regulations and regulatory Bodies

The Company should conduct and govern itself with ethics, transparency and accountability.
 The Company should develop governance structures, procdures and practices that
ensure ethical conduct at all levels; and promote the adoption of this principle across its
value chain.
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 The Company should communicate transparently and assure access to information about its
decisions that impact relevant stakeholders.
 The Company should not engage in practices that are abusive, corrupt or anticompetition.
 The company should truthfully discharge its responsibility on financial and other mandatory disclosure.
 The company should report on th status of its adoption of these Guidelines as suggested in the
reporting framework in this document.
The Company should Promote the well-being of all employee
 The Company respect the right to freedom of association, participation,collective
bargaining and provides access to appropriate grievance Redressal mechanism
 The Company shall provide and ensure equal opportunities at the time of recruitment as well
as during the course of employment irrespective of caste, creed, gender, race,
religion,disability
 The Company shall not use child labour, forced labour or any form of involuntary labour paid or unpaid.
 The company shall strive to instil a sense of dusty in every employee including those of the
service providers at the company’s premises, towords their personal safety, as well as that of
their co-workers and provide a workplace environment that is safe, hygienic humane , and
which uplods theb dignity of the employees.
 The company shall ensure continuous skill and competence upgrading of all employees by
providing access to necessary learning opportunities, on an equal and non-discriminatory basis.
The company shall promote employee morale and career development through enlightened
human resource intervention.
 The deputy Managing Director of the company shall be responsible for the implementation of
the policy under overall supervision of Board of Directors. The Deputy Managing Director may
take support of such functional he as and internal and external experts, which he may deem fit,
for the effective implementation of the Policy.
 The company shall conduct its business practices/ activities in alignments with the following
key principle which are broadly based on the principle envisaged in the National Voluntary
Guidelines in the interest of social set up, environments and governance:
 The company should avoid complicity with the actions of any third party that violates
any of the principle contained in these Guidelines.

Sector Contribution to Economy

The global steel industry, like many other industries witnessed a year of two splits
in year 2020. A sharp decline in both steel demand and production in the first half and sharper
than expected recovery in the second half. Global steel production in 2020 dropped by 0.9% to
1863 MT from 1880 MT in s2019.
Steel demand fell by 0.20% to 1771.80 MT from 1775 MT in 2019.

The impact of COVID-19 has been much more benign for the steel industry due
to resurgent demand in China and better than expected post lockdown recovery globally in
second half of 2020. China and Turkey were two key countries that saw an increase in finished
steel demand of 9% and 13% respectively in 2020. North America and the European Union
(EU) have experienced demand decline of round 11%-16%. India also contributed to global
decline, as steel consumption in India declined by13.7% to 88.5 MnT in 2020 against 102.6
MnT in 2019.upto30% of global steelmaking capacity (excluding China) was idled or
production at steel mills significantly reduced in response to a pandemic
–induced drop in demand. However, the recovery I automotive productions
and white goods manufacturing was quicker than expected when the strictest lockdown
12
measures were lifted .Their construc6tion sector was less affected ,as it was supported by
government stimulus schemes in many regions. As a results, steel prices rallied in all regions
in late 2020.
In India , as per India steel Association (ISA), steel demand is estimated to grow
7% in year 2021 . in year 2020, crude steel production and finished steel production in 9india
was 108.5 MT and 101.03MT, respectively. Between April 2020 and February2021, Indians
cumulative production of finished steel stood at 85.60mMt while the cumulative production of
crude steel stood at 92.78 MT.
In 2019 ,the governments introduced Steel Scrap Recycling Policy with an aim
to reduce import. The industry is also benefiting from the developments happening across
various in industries . The new vehicle scrappage policy will help in reducing the steel prices
since the policy enable recycling the materials used in old vehicle . In 2021 , Indian Railway is
planning to produce over11 lakh tons of steel for the track renewal and laying new lines across
the country.
Governments has taken various stop to boost the sector including allowing
100% Foreign Direct Investment (FDI) in the steel sector under the automatic route .
According to the data released by Department for promotion of Industry and Internal
Trade (DPIIT) , Indian metallurgical industries attract Foreign Direct Investment (FDI) to
the tune of Us$ 14.24 billion between April 2000 and September 2020.

Problem faced by the sector in general and Company

1. Lower productivity of labour.

2. Irregular supply of energy.
3. Poor infrastructure Adapting To Technological Changes
4. Shortage of Raw Material

Future Potential of the Sector

As of April 2022, India was the world’s second-largest producer of crude steel, with an output
of
10.14 MT. In FY22, the production of crude steel and finished steel stood at
133.596 Mt and 120.01 MT, respectively. The growth in the Indian steel sector has been driven
by the domestic availability of raw materials such as iron ore and cost-effective labour.
Consequently, the steel sector has been a major contributor to India’s manufacturing output.
The Indian steel industry is modern, with state-of-the-art steel mills. It has
always strived for continuous modernisation of older plants and up-gradation to higher
energy efficiency levels.
The Indian steel industry is classified into three categories- major producers,
main producers and secondary produce.

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 Actual Work Done

Week1 Bill Checking

Week2 Income tax
Week3 Capital Budgeting
Week4 Financial Statement
Week5 Balance Sheet

RESEARCH DESIGN

Definition:-

Research Methodology is the specific procedure or technique used to identify , select , process ,
and analyse information bout . In the research paper , the methodology section allows the
reader to critically evaluated a study overall validity and reliability

Research methodology used for study includes both primary& secondary sources of data.
However most of study is conducted based on secondary source. Research methodology is a very
organized and systematic way through which a particular case or problem can be solved
efficiently.
In it we study the various step that are generally adopted by researchers in studying his research
problem along with the logic behind them. Researchers not only know how to develop certain
tests, how to apply particulars research technique but they need to know which of the methods
are relevant and which are not. A researcher will always need to understand the assumptions
underlines various technique and he/ she need to know the criteria by which they can decided
certain technique and procedures will be applicable to certain problems.

So it is very important to understand research methodology before proceeding further forb

collection any data for a project work.
Mainly the data has been collected from finance department of SUNFLAG IRON & STEEL
COMPANY LTD.

The person who provided this primary as ell s secondary data are:
i. General manager
ii. Junior Officers
iii. Office assistants
These personnel are currently working in finance department and the trainer is a
who conduct the performance appraisal training programme for employees Now the data
collected from the above personnel is

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 DATA COLLECTION METHOD

Data sources:-
1) Primary data: Discussions, informal interviews of the above mentioned
personnel revealed lot much data, which was first hand. This data collection method can
come out with good quality data& also the non-verbal communication here plays important
role as the information
a. Questionnaire –sample questionnaire.
b. Contact method
c. Personal interaction.

2) Secondary data:-this is the data, which is provided by the above mentioned

personnel; but the main point of differentiation is about the way of delivering the data. This data
is already collected & stored by th company & made available employees as well to the outsides
for their official use & with prior permission of the company.

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TITAL 0F THE PROJECT

A Study on Financial Planning for Salaried Employees

and Strategies for Tax Savings

ABSTRACT--- A financial plan is something that you create after considering your current income,
savings, expenses, future earnings, insurance if any, financial goals and a vision for your future life. You
then try to choose savings and investment options 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. It is imperative for an individual as it helps in maintaining steady 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 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 of the salaried individuals. The survey was done within the region of Pune, Maharashtra for the
period of 2 months (1st June, 2020 to 31st July, 2020). The purpose of the study is also to find out the
most suitable and popular tax saving instrument used to save tax and also to examine the amount saved
by using that instrument.
Keywords: Financial planning, tax planning, tax saving instruments.
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 the tax saving instruments. Thanks
to the plethora of tax exemptions and incentives 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 logic or the rationale behind the investments made. Further the guiding force in
investment seems to be the "rebate" they receive from the individual agents and advisors. The more
the rebate an agent gives, the self-satisfied person are in the belief that they have made an intelligent
decision of choosing the right agent who has offered them more rebate. In the process what is not
being realized is the fact that the financial future is getting compromised.
CONCEPT & SIGNIFICANCE OF THE STUDY
Financial Planning is an integral part of any individual life, especially in this modern world where
value of everything is expressed in terms of money. The active working span of human life is short as
compared to the life span. This means people will be spending approximately the same number of
years in after retirement what they have spent in their active working life. Thus, it becomes important
to save and invest while working so that person will continue to earn a satisfying income and enjoy a
comfortable life style.
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SCOPE OF THE STUDY
The scope of study is getting familiar with various investment avenues available in market. To study
the life stages of an individual and to identify their risk tolerance, income flow, life goals and current
investment. Study should cover all areas of the individual’s financial needs and should result in the
achievement of each of the individual’s goals.
The scope of planning will include the following:
 Risk Management and Insurance Planning
 Investment Planning
 Retirement Planning
 Tax Planning

OBJECTIVES OF THE STUDY

Primary objective:

 To understand financial planning done by salaried employees

 To spread awareness about financial planning among the working-class people
 To understand the saving-investment behaviour of the salaried employees
 To understand the importance of tax planning

Secondary Objective:
 To gain knowledge about the various investment avenues keeping in mind the significance of tax
saving
 To understand how savings can be increased for the future using different instruments
 To find out the most suitable investment instrument for salaried investors
 To examine the amount saved by using that instrument

REVIEW OF LITERATURE

A large number of salaried tax payers in India start planning their tax saving investments very late in the
year when the time limit for submission of investment evidence is coming to an end or at the end of the
financial year. While it may help you in saving taxes, it might not be the best decision that you have
made.
Given below are the 3 reasons why planning in advance will help you:
 Choose the best option: When you plan ahead, you get time to choose an investment scheme that
will suit your needs and financial condition – how much risk you can take, your cash
requirements, for how long you can invest etc. It will help you arrive at the best decision.
 Helps in avoiding last minute aggravations and blunders: When you are rushing making
investments, it may lead to unforeseen investment errors. You might not have enough time to
perform due diligence before making an investment decision.
 Plan the schedule for investment payments through the year: When you begin the investment
procedure early in the year, it gives you flexibility for planning payments during the course of the
year.

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Given below are some of the best tax saving investment opportunities in India:

Table 1. Tax Saving Instruments

Total Tax
Sr. no. Tax saving Tax Benefits Under Section Deductio n
Instruments
Section 80C
(Premium & Section 10(D) Up to Rs. 1,50,000
1 Life Insurance (Death/Maturity
)
Up to Rs.
2 Health Insurance Section 80D 55,000
Unit Linked
Insurance Plan Up to Rs. 1,50,000
3 80CCC
( ULIPs)
Up to Rs. 1,50,000
New Pension Addition
4 Scheme (NPS) Section 80CCD al Rs. 50,000

5 Equity-linked Section 80C Up to Rs.

Tax Saving 1,50,000
Scheme (ELSS)
Public Provident Fund Up to Rs. 1,50,000
6 (PPF) Section 80C
National Saving Up to Rs. 1,50,000
7 Certificate Section 80C
(NCS)

Let’s discuss how tax saving for salaried individuals can work with each of these options:

1. Employees’ Provident Fund (EPF)

Employees’ Provident Fund, also known as EPF, is one of the most popular tax saving
options for salaried people. It was introduced under the Employees’ Provident Fund
and Miscellaneous Act of 1952 and is managed by the Central Board of Trustees.

Under this scheme, both the employee and employers contribute 12% of the
employee’s salary to the Employee Provident Fund. On their contributions, the
employees receive interest at a specific rate.

Tax saving for salaried employees under EPF comes in the form of tax exemption. The
accumulated fund in an employee’s PF account along with interest earned is tax-free.

2. Public Provident Fund (PPF)

Public Provident Fund, popularly known as PPF, is a tax saving option for
salaried individuals that provides a return on the investments, which are free from tax.

18
Being one of the best investment-cum-tax saving options for salaried people, PPF
enables them to plan for creating a corpus for retirement and earn guaranteed returns.
PPF investments fall under the EEE or Exempt-Exempt-Exempt category. It means that
the amount one invests in a PPF account is tax-deductible under Section 80C and thus,
helps in income tax planning for salaried employees. Alongside, the accumulated
amount, along with the returns, is exempt from tax when withdrawn from the account.
This is one way how the tax benefits for salaried employees can be optimized.

3. Equity Linked Savings Scheme (ELSS)

If you are looking for financial tools that enable income tax deductions for salaried
employees, consider ELSS. Equity Linked Savings Scheme or ELSS is considered one
of the best tax saving options for salaried individuals. Investment in ELSS schemes is
eligible for deduction from an employee’s taxable income u/s 80C. You should also
know that its qualification for tax deduction makes it different from all other mutual
fund schemes.

ELSS stands out from other tax saving options for salaried individuals because of its
dual benefit – comparatively higher returns, which are partially taxable. After Mar 31,
2018, ELSS returns are taxable at 10% for gains above Rs, 1,00,000.

4. National Pension Scheme (NPS)

National Pension Scheme (NPS) is one of the long-term tax saving options for
salaried people in India. It is an investment plan that falls under the purview of PFRDA
and the Central Government. People who want to plan for early retirement and have
low- risk appetite invest in NPS. Besides, it also serves as a means for income tax
deductions for salaried employees.
Compared to PPF and Fixed Deposit (FD), NPS investments can provide higher returns
but is not equally tax-efficient. Tax benefits for salaried employees can be claimed
under Section 80 CCD (1) within the Rs. 1.5 Lakh ceiling u/s 80CCE. In other words,
it helps in income tax planning for salaried employees.

5. Tax Saving FD
A tax saving Fixed Deposit or FD is quite popular as one of the tax saving options for
salaried individuals. It is a type of FD with which help in availing of income tax
deductions for salaried employees on your investments of a maximum of Rs. 1,50,000.
The related tax benefits for salaried employees are covered under Section 80C.

Along with FDs, there are many other tax saving options for salaried people to create

19
wealth. However, tax-saving FD, which has a lock-in period of 5 years, is deemed as
the safest option for tax savings for salaried employees.

The returns from FDs are safe but are taxable. It is added under the head ‘Income from
Other Sources’ in the ITR and gets taxed at applicable rates.
6. National Pension Scheme (NPS)
The uncertainties in life call for planning for the financial security of your loved ones
under life insurance. While the primary benefit of buying a life insurance plan is to
secure the financial needs of your family, you can also avail of tax benefits on such
investments.

In fact, buying life insurance is considered one of the most sought-after tax saving
options for salaried people. You can use online insurance premium calculator to check
how much tax you can plan to save in a financial year. The premiums you pay toward
life insurance is tax-deductible u/s 80C, up to the limit of Rs. 1,50,000. Furthermore,
the

death benefits or survival benefits under these plans are tax exempted u/s 10(10D). As
a result, investments in life insurance plans lead to tax savings for salaried employees.

7. House Rent Allowance (HRA)

Individuals living in rented accommodation can avail tax benefits for salaried
employees as per the related rules. HRA or House Rent Allowance (HRA), a part of an
employee’s salary structure, is not fully taxable, leading to income tax deductions for
salaried employees.

What makes HRA one of the tax saving options for salaried individuals is that a part of
it is exempted u/s 10(13A) of the Income Tax Act, 1961, subject to certain clauses. The
taxable income is calculated after deducting HRA from the total income.

You should also know that HRA received from the employers is fully taxable if you
live in your own house and do not pay any rent. This is a crucial aspect you must
consider to understand how salaried person can save tax.

8. Leave Travel Concession (LTC)

Leave Travel Concession or LTC, as the name suggests, is an exemption that salaried
employees receive from their employer to travel on leave. Although the tax savings for
salaried employees looks simplified under LTC, there are various rules related to

20
claiming LTC exemption. Some of them are:

 The employees must go on an actual journey to get tax exemption.

 Only domestic travel expenses are considered under LTC exemption.
 The tax savings for salaried individuals apply on actual travel costs like bus or
rail fare, but not on miscellaneous expenses such as local sightseeing.
You should also know that LTC cannot be treated as a tax-free income every year u/s
10(5) of the Income Tax Act.

9. Retirement Benefits (Gratuity)

Gratuity is yet another option for tax saving for salaried employees. It is given either
on superannuation, resignation, retirement, or death or disablement of an employee.
Another prerequisite is that the employee must complete a minimum of five years of
service with an employer.

The gratuity amount received on any of these eventualities is tax-exempt u/s 10(10),
up to the limit of Rs. 20,00,000. Previously, this limit was Rs. 10,00,000 but has been
recently increased as per CBDT Notification no. S.O. 1213(E).

10. Health Insurance Premium

Health insurance plan provides financial security to you and your loved ones in
medical emergencies or planned hospitalisation. Besides safeguarding your financial
interests, health insurance is one of the most used tax saving options for salaried
people.

In general, the premiums paid towards health insurance are eligible for income tax
deductions for salaried employees, subject to the term of Section 80D. As a part of
planning income tax for salaried employees, you can benefit more from this provision
by paying for health insurance of your spouse, dependent children, and parents.
The maximum deduction you can avail u/s 80D is Rs. 1,00,000

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RESEARCH METHODOLOGY

Statement of the Problem

Collection of income from direct taxes in India is considerably less when
compared with collection of taxes in other country and indirect taxes within the country
itself. In India number of people paying income tax is very less. What is the reason for
this? Are there any loop holes in our laws and rules pertaining to income tax, tax payers
use various methods to avoid and evade their income taxes? Some of the provisions are
being misused by tax payers.

Need for the Study

Taxes contribute to almost 65% of total union budget, among that direct taxes
alone as almost 35% of its share, but when it comes to income taxes it is just 15% of
nation’s total budget on an average since 2014-15 to 2018-19. Even though paying
taxes to government is one of our fundamental duty there are very a smaller number of
people paying tax. In September 2020 it was reported that “Only 1.46crore of
individual taxpayers declared income above Rs5lakh” reported one of the sources.

RESEARCH DESIGN:

Type of research design : Descriptive research

Research equipment : Questionnaire
Sampling technique Non-probability technique-
convenience sampling method
Sample size : 190 samples
Sample design : Data has been presented with the help of bar graphs,
pie- charts, etc.
Area of research : Pune, Maharashtra.

SOURCES OF DATA:

Both the primary sources and secondary sources of data have been used to conduct the study.
Primary source:
The primary data for this study has been collected by approaching the salaried employees via internet
(digital survey method).
Secondary source:
The secondary data are collected from articles published on various websites (desk research).

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DATA ANALYSIS AND INTERPRETATIONS

1. Age of the respondents

Age No. of Percentage

respondents
20-30 126 60%
30-40 41 22%
40-50 15 8%
50-60 8 4%
Grand Total 190 100%

The majority of respondents were from the age groups of 20- 30, i.e. 66.%, and 30-40, i.e. 22%. 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 30-40
are stable and careful as they have bigger responsibilities like family, home loans, car loans,etc. This is
the stage when they begin to think/plan for a secure future. Hence, they take tentative steps towards
investments.
2. Gender distribution of the respondents:

Gender No. of Percentage %

respondents
Female 74 39%
Male 116 61%
Total 190 100%

From the above figure, we can interpret that, from all the respondents, 61% are males whereas 39% are
females. Hence, we can say that, the females have started to work shoulder to shoulder with the males in
our developing society.

3. Annual Income of the respondents:

The above figure shows that a major portion of respondents are in income slab of above Rs.5 lakh
p.a.,i.e. 34%, this indicates that the person may be in the mature stage of career. On the contrary, the
second major group of respondents belong to the income slab of upto Rs.2 lakh, i.e. 20%, 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.

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 4. Occupational status of the respondents :

Percentag
Occupational No. of e
status respondents %
Teachers/Lecturers 20 11%
Doctors /Engineers 76 40%
Officers 27 14%
Clerks /others 67 35%

Total 190 100%

Most of the respondents were doctors/engineers i.e. 40%, whereas 35% of respondents were from the
category of clerks/others. Respondents belonging to the category of teachers/lecturers and officers
were 11% and 14% respectively.

5. Annual savings of the respondents:

No. of
Annual savings respondents Percentage %
Less than Rs. 78 41%
25,000
Rs. 25,000-50,000 34 18%
Rs.50,000-75,000 19 10%
Rs.75,000-1,00,000 17 9%
More than Rs.
1,00,000 42 22%
Total 190 100%

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. 41% of the total respondents; and on the contrary 22% 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 responsibilies of a middle class worker, less income,
more spending, debts/loans, lack of awareness regarding savings and investment, and not to forget
inflation.The respondents have also shown a slow and steady/increasing saving pattern after they have
completed their expenses, as we can see in the figure.

6 . The Motivators of savings of the respondents :

Motivators of savings No. of Percentage

respondents %
To meet specific 85 45%
purpose
To earn income 36 19%
To meet
contingent 27 14%
expenses
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 To get tax benefits 3 2%
To be secured at old age 39 20%
Grand Total 190 100%

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 45% of respondents have selected this option. These specific purposes for
saving can be personal expenses like buying luxuirious goods, family’s expenses, saving for children’s
future, health expenses, vacations, wedding, etc. Whereas, there are only 2% 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.
7 Factors considered by the respondents for increasing the size of savings
No. of Percentage
Factors respondents %
Increase in salary 73 39%
Additional
income/increments 67 35%
Future needs 44 23%
Tax benefits 4 2%
Statutory requirements 2 1%
Total 190 100%

The figure shown above indicates that, in order to increase the size of savings, an increase in salary is
expected, as 39% of the salaried respondents have chosen this option. Additional income/increments
also needs to be considered in order to increase savings.Future needs of an individual can be considered
as a factor which pushes an individual towards saving more of their income as it may benefit at the time
of need.Tax benefits and statutory requirements are the least considered factors while increasing the
savings.

8 Investment preferences of the respondents:

No. of
Investment responses Percentage %
Preference fo
r each
respondent
Bank Deposits 71 37.4%
Mutual Funds 72 37.9%
Fixed deposits 66 34.7%
Insurance Policies 38 20%
Govt. Securities i.e.,
PF, GPF/PPF 82 43.2%
Post Office deposits 17 8.9%
Equity Market 30 15.8%
Gold 96 50.5%
Total 100%

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It is observed that half of the respondents (i.e. 50.5%) mostly prefer to invest in gold. Due to some
influencing factors such as high liquidity and inflation-beating capacity, gold is one of the most preferred
investments in India. Gold investment can be done in many forms like buying jewelry, coins,
bars, gold exchange-traded funds, Gold funds, sovereign gold bond scheme, etc.
9 Respondents’ investment trend in the recent years:

No. of
Investment trend respondents Percentage %
Increasing 79 42%
Decreasing 31 16%
Remaining 80 42%
Constant
Grand Total 190 100%

The figure shows that the investment trend of the respondents is either at an increasing stage or is
remaining constant through recent years of investment. We can interpret that, an increase in investment
can be influenced by the increase in income, savings, future needs, decrease in interest rates, attractive
returns on investment, proper knowledge/awareness about the benefits of investment, etc. On the other
hand, decrease in investments can be caused due to lack of knowledge, disorganised investment,
psychological behaviour of the investor, decrease in income/savings, more spending/expenses, inflating
rates, etc.
10 Time horizon of investments::
No. of Percentage
Horizon of investments respondent %
s
Long-term (More than 10
yrs.) 44 23%
Medium-term (More than
5 yrs.) 48 25%

Short-term (More than 1 21 11%

yr)
Very short-term (Less
than 1 7 4%
yr)
As per convenience 70 37%
Total 190 100%

37% of the respondents prefer to invest as per their convenience. Investment objective to a greater
extend determine the investment tenure and the avenue. Different investment objectives have different
investment avenues to meet them. By determining the objective we can easily determine the investment
vehicle for individuals.

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 11 Whose advice do the respondents take while investing:

No. of
Advisors respondents Percentage
%
Spouse/family 81 43%
members
Friends/ colleagues 24 13%
Company Agents 0 0
Financial advisors 20 10%
Self-decision 65 34%
Grand Total 190 100%

Most of the investment decisions are influenced by taking the advise of spouse/family members (43%)
or can be self-made decisions (34%) as well.
Investing money requires a meticulous approach and acting on a piece of advice calls for adopting an
extra layer of caution. In today’s world, the investor, have a plethora of investment options at their
disposal. However, what’s essential is to be aware of the pitfalls and seek help from seasoned
professionals to maximise gains.

12 Respondents’ awareness of tax saving instruments:

Awareness Inco No Tota
of Full Just Not rr Res l
tax y Awa Awa ect po resp
savi Awa re re resp
ng nse on
instrument re on dent
s ses
s
Life
Insurance 114 60 10 4 2 190
Health
Insurance 114 59 15 1 1 190
ULIPs 34 37 113 2 4 190
NPS 62 74 50 1 3 190
ELSS 38 58 90 0 4 190
PPF 111 48 25 5 1 190

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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 13. The type of investment plan does the respondents prefer in future:

Future No. of
investment plan responses of Percentage %
preference eac
h
respondent
Regular return 92 48.4%
plan
Pension plan 74 38.9%
Medical plan 56 29.5%
Specific 35 20%
purpos
e plan
Multiple option 74 38.9%
plan
Total 100%

From the above figure, we can conclude that most of the respondents prefer a regular return plan for
future investment, as their main motive for investing might be to get a good return on investment as they
continuously invest. Around 48% people show interest in this type of plan. The second most investment
plan preferred by the respondents are pension plan and multiple option plan with 38.9% of the
preference. Medical plan and specific purpose plan are amongst the least preferred plans for investment,
with 29.5% and 20% respectively.

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FINDINGS

 The study reveals that majority (66%) of the respondents were from the age group of 20-30 years
and most of them were from the male category (61%).
 From the annual income, it is found the middle-class as well as the upper middle-class working
employees were the target respondents. The respondents were mostly doctors/ engineers.
 Most of the respondents save less than Rs. 25,000 annually from their annual salaries.
 The motivators for saving for most of the respondents is to meet a specific purpose.
 According to the results, an increase in salary or additional income/increments will help an
individual to increase the size of their savings.
 Gold is found to be the most preferred choice for investment, whereas other investment preferences
include Govt. Securities i.e., PF, GPF/PPF, bank deposits, mutual funds and fixed deposits.
 The investments trend amongst the respondents is either increasing or decreasing, on the other hand
a few respondents' investment is remaining constant.
 Majority of the salaried employees' do not have a specified time horizon behind their investment
decision as they prefer to invest as and when it is convenient for them. On the other hand, most of
them invest for medium term as well as long term.
 Most of the salaried employees take the advice of their spouse/family members, as they can be said
to be the most trusted individuals. The respondents have also taken their own decisions for making
their own decisions.
 Most of the salaried employees get information about investments from their family members and
colleagues, whereas a few get information from journals and magazines, organizational reports, T.V
and radio, etc.
 From the study, it is found that conducting workshops and seminars is a good initiative to create
awareness amongst salaried individuals about the importance of investments.
 The study has also revealed that most of the salaried employees are not aware about the benefits
of tax saving investments like ULIPs, NPS and NSC. Life insurance, health insurance as well as
PPF are the popular investment options.
 Most of the respondents prefer a regular return plan as a choice for their future. Other preferences
include pension plan, multiple option plan and medical plan.

LIMITATIONS

 Reluctances of the respondents to provide information can affect the validity of the
responses.
 The lack of knowledge of the respondents about the financial instruments can be a major
limitation.
 The information can be biased due to use of questionnaire.
 The study was conducted for 2 months i.e. from 1st June 2020 to 31st July 2020.
 The survey was conducted digitally, hence there was lack of physical presence from both ends.
 The responses were anonymous.
 Question number 14 from the survey conducted was found to be a little difficult to understand
for a few respondents. Hence, 15 responses were either un- attempted or answered incorrectly.

CONCLUSION
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.
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
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  Cutting down unnecessary expenses and saving for a better future
 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 ambiguity
Suggestions
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. At time of maturity it is necessary
to produce the investment documents which act as a proof. But many times, investors do not have proper
documents which dishonours the claim at maturity. It is also recommended that all the disclosure
documents also be preserved as it would help in case of any dispute in settlement. People need to be
educated and informed about Financial Planning as well as tax saving and this provides a greater
opportunity to financial product distributer like ICICI SECURITIES, TATA Mutual Fund and Reliance
Money to educate people. Companies can arrange for seminars and sessions through which they can
provide information to people and in return can get prospective clients from the audience. In this way
both the audience and the company can also be benefited. Investment through SIP should be encouraged.
A little amount regularly invested for long period can create a greater wealth. SIP helps in Rupee cost
averaging, develop habit of saving and it provides convenience of investment.
Mutual funds could provide better advice to their investors through the net and through the traditional
investment routes where there is an additional channel to deal with the brokers. Direct dealing with the
fund could help the investor with their financial planning. If an investor is seeking help from advisor
then he should collect enough information of product from different sources. It will help to take proper
investment decision and choose a right advisor. It is also necessary that advisor should have enough
experience. Thus, the ultimate responsibility is on the investor when it comes to taking investment
decision.
Goal should be properly divided into short term, medium term and long term. Proper allocation should
be done in various instruments according to the time period of goal. There are various instruments
available which can site different time period needs. If investment is giving regular return or are going to
get matured should be reinvested properly. Financial planning is not a onetime activity, the initiative
should be taken by financial planner to put this forward to their client. Regular meetings should be
conducted between the financial planner and client to review the investment portfolio. This is one area
where many planners are lacking today. Follow-up, follow-up, follow-up is need of hour and it should be
understood by financial service provider.

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REFERENCES:
Websites:

 https://www.policybazaar.com/income-tax/tax- saving-instruments/
 https://www.coverfox.com/life- insurance/articles/life-insurance-tax-benefits/
 https://groww.in/blog/tax-saving- options/#1_Life_Insurance_Plans
 https://cleartax.in/s/medical-insurance
 https://www.apollomunichinsurance.com/blog/how- much-tax-do-you-save-through-health-
insurance.aspx
 https://cleartax.in/s/unit-link-insurance-plan-ulip
 https://cleartax.in/s/nps-national-pension-scheme
 https://www.moneycontrol.com/news/business/mutu al-funds/-1808067.html
 https://www.bankbazaar.com/saving-schemes/ppf- tax-benefits-and-features.html
 https://cleartax.in/s/nsc-national-savings-certificate
 https://www.icicipruamc.com/InvestCorrectly/Basics
-of-Mutual-Funds/Save-tax-with-ELSS.aspx
 https://www.icicibank.com/knowledge-base/tax/tax- saving-schemes.page
 https://www.iciciprulife.com/insurance- library/income-tax/tax-planning-for-
salaried.html#:~:text=1.,is%20exempt%20in%20so me%20cases.
 https://www.hdfclife.com/insurance-knowledge- centre/tax-saving-insurance/tax-planning-
tips-for- salaried-employees
 https://www.entrepreneurshiplife.com/6-financial- planning-tips-for-salaried-professionals/


Bibliography:
 https://www.icai.org
 https://www.icai.org/post/bos-knowledge-portal
 https://www.cleartax.in

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