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A STUDY ON FINANCIAL PLANNING AND APPROACHES FOR TAX

SAVINGINTENDED FOR SALARIED EMPLOYEE POST COVID

Conference Paper · June 2023

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ANVESAK
ISSN : 0378 – 4568 UGC Care Group 1 Journal

A STUDY ON FINANCIAL PLANNING AND APPROACHES FOR TAX

SAVINGINTENDED FOR SALARIED EMPLOYEE POST COVID

Dr. Ajay Harivansh Shukla,

AssociateProfessor, DY Patil University Pune, TalegaonDabhade, Maharashtra 410506

Dr. Sachin Kulkarni

Professor, DY Patil University Pune, TalegaonDabhade, Maharashtra 410506

Dr.HetalBhinde
Assistant Professor, Indira School of Business Studies, Tathawade, Pune, Maharashtra 411033

Abstract
In order to manage income, expenses, future earnings, and planning investments a salaried
employee makes a financial plan. Tax management is the action of a taxpayer to lower his or
her tax payment. It is a tool for developing a financial planning strategy for the long run. The
study focuses on financial planning and approaches for tax saving intended for salaried
employees. The most preferred instrument for saving amongst salaried employees is PPF
(Public Provident Fund). LIC, Home loans, child education plans, National Pension schemes,
National Saving Certificates, ELSS are some other options preferred for investments.
Keywords—financial planning, tax saving, salaried employees
Introduction
Every employee plans for income and expenses. It is expected that every salaried employee
plans his funds to be investment for short and long term. Considering rules and regulations of
government, tax planning is necessary. Awareness regarding financial planning and approaches
for tax saving intended for salaried employee is usually low. It is found that SEBI and IRDA
is taking active efforts to plan taxes of salaried employees. It is recommended for salaried
employees to make use of 80C and 80Cc deductions and plan tax liability.
Literature Review
Suryanarayanan and Seethalekshmy (2017) discussed that examine investment choices among
instructors working at junior colleges in Mumbai in this research study. For the purposes of the
study, certain financial instruments are used. This study discovers financial product awareness,
variables impacting investment decisions, and investment preferences for financial goals.
Roy, Debalina& Ghosh, Koushik. (2011) in their work studied Systematic Investment Plan
(SIP) to boost income and wealth of investor. They proposed that SIP is a safe mode of
investment of individuals to earn long term financial gains.
Borgaon, Harshal (June 30, 2020) compared Systematic investment plan and One time
investment as to find most suitable investment option and found one time investment is always
preferred by investors.
Materials and Methods
Statement of problem
Financial planning and strategies for tax savings to optimize balance between income and
savings for salaried employees post covid.
Objectives of the Study
To investigate the financial planning practices of salaried individuals and to comprehend their
saving-investment behavior postcovidby investigating various investment channels.
Scope of the Study
The current study's focus is confined to salaried assessors. The research measures and analyses
the salaried assessors' tax preparation techniques and knowledge, saving habits, investment
decisions, and outflow of liabilities. The revenue in the research includes pay income as well

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as income from other sources, such as interest on bank accounts. Employees from both the
commercial and governmental sectors were included in the study. In the private sector, global
organizations and Indian firms from various industries ranging from manufacturing to service
industries such as telecom, information technology, pharmaceuticals, composites, and so on
were included. Workers of Central and State Governments, employees of Government firms
and corporations, and employees of State Government, aided institutions and schools were all
included in the public sector. Salary assessments were divided into four groups depending on
their levels of income and the income tax slabs for people. The study also collected the age and
gender of the salaried workers in order to have a better picture of their risk profile, savings, and
investing habits.
Sampling Techniques
Sampling Unit: Salaried employee from public and private sector from Nashik.
Sampling frame and size: 90 samples from the population (both private and Govt. sector) were
considered in the survey.
Sampling method: Judgment samplingi.e. a type of Non-probability sampling.
Limitations of the Study
It covers the time frame from 2021-22 financial year. The study is sampling based and results
may vary based on change in sampled units.
Type of research
The study is descriptive cross-sectional research which attempts to study financial planning
and strategies for tax savings.
Data Collection
The research is confined to Indian context only. The research data is collected from
secondary sources like website, research papers, articles, etc.The primary data is
collected using a structured questionnaire.
Results and Discussion
This section gives a brief of the data collected from primary survey.
Results
TABLE I. THE RESPONDENTS CLASSIFIED ON THE BASIS OF THEIR GENDER

GENDER

35
55

MALE FEMALE

Fig. 1. The respondents classified on the basis of their gender

TABLE II. THE RESPONDENTS CLASSIFIED ON THE BASIS OF THEIR AGE

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AGE
38
50 25 17 9
0
20-30 30-40 40-50 50-60

AGE

Fig. 2. The respondents classified on the basis of their age

TABLE III. THE RESPONDENTS CLASSIFIED ON THE BASIS INCOME OF THE RESPONDENTS

Income
36
40
30 16
20 6
10 4 2
0
Between Rs Between Between Between Above Rs.
5 Lakh to Rs. 7.5 Lakh Rs. 10 Lakh Rs. 15 Lakh 20 Lakh.
Rs. 7.5 Lakh to Rs. 10 to Rs. 15 to Rs. 20
lakh Lakh Lakh

Fig. 3. The respondents classified on the basis of their income

TABLE IV. THE RESPONDENTS CLASSIFIED ON THE BASIS OF SAVINGS OF THE RESPONDENT

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Savings
47
50
40 30
30
20 8
10 5
0
Less than Between Between Over 50%
20% 20% -35% 35% -50%

Fig. 4. The respondents classified on the basis of savings of the respondent

TABLE V. THE RESPONDENTS CLASSIFIED ON THE BASIS OF UTILIZATION OF TAX BENEFITS

utilization of tax benefits

56
60
40 34

20
0
Yes No

Fig. 5. The respondents classified on the basis of utilization of tax benefits

TABLE VI. THE RESPONDENTS CLASSIFIED ON THE BASIS OF TAX SAVINGS INSTRUMENTS USED
BY THE RESPONDENTS

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Tax savings instruments used by the

respondents

Fixed Deposit 21
Sukanya samridhi… 3
National Saving… 2
Equity-Linked tax… 3
New Pension… 10
ULIP’s 6
Health insurance 20
Life insurance 25

0 10 20 30

Fig. 6. The respondents classified on the basis of tax savings instruments used by the
respondents
TABLE VII. THE RESPONDENTS CLASSIFIED ON THE BASIS OF ADVICE TAKEN BY RESPONDENTS
WHILE INVESTING

Tax savings instruments used by the

respondents
60
39
40 30
20 12 9
0
Self Family Friends Financial
Decision members Advisor

Fig. 7. The respondents classified on the basis of advice taken by respondents while investing
TABLE VIII. THE RESPONDENTS CLASSIFIED ON THE BASIS OF USE OF SAVINGS BY RESPONDENTS

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Savings

buy fixed deposit

schemes
22
31
buy gold and
ornaments

Make investments in 10 27
Mutual Funds

Fig. 8. The respondents classified on the basis of use of savings by respondents

TABLE IX. THE RESPONDENTS CLASSIFIED ON THE BASIS OF INCOME TO EXPENSES

Income to Expense
60 50
36
40
20 4
0
Expenses well Expenses nearly Expenses
within Income equal to Income exceed Income

Fig. 9. The respondents classified on the basis of Income to Expense

TABLE X. THE RESPONDENTS CLASSIFIED ON THE BASIS OF OBJECTIVE OF THE RESPONDENT
WHILE TAKING LIFE INSURANCE

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Objective of the respondent while taking

life insurance

I do not have any life… 18

covering risk of life 17
investing for my… 3
investing for my child’s… 5
investing for long-… 26
saving my income tax 22

0 10 20 30

Fig. 10. The respondents classified on the basis of Objective of the respondent while
taking life insurance
TABLE XI. THE RESPONDENTS CLASSIFIED ON THE BASIS OF TAX PLANNING DURING THE YEAR

Tax planning during the year

Take the help of an expert like

30
Chartered Accountant (CA)

Do not actively plan and meet

12
most of my tax liability from the…

Plan tax saving towards the end

14
of the Financial Year

Estimate all income during the

34
year, plan investments availing…

0 10 20 30 40

Fig. 11. The respondents classified on the basis of Tax planning during the year
TABLE XII. THE RESPONDENTS CLASSIFIED ON THE BASIS OF TYPE OF INSTRUMENTS PEOPLE LIKE
TO INVEST

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type of instruments people like to invest

offer substantially
higher returns
19
whilethere is risk of
capital erosion
offerslightlyhigher
returns and largely 22
protect capital

offer fixed guaranteed

49
return

0 20 40 60

Fig. 12. The respondents classified on the basis of type of instruments people like to
invest
Discussion
According to the survey, the maximum (43 per cent) of respondents were between the ages of
30 and 40—the maximum of them being men (61 per cent). Based on yearly income, it was
discovered that the target respondents were middle-class and upper-middle-class working
employees. The majority of responders save less than 20% of their annual salary. For most
responders, saving is motivated by the desire to achieve a certain goal. According to the study,
a raise in pay or increased income/increments will assist an individual in increasing the amount
of their savings. The majority (62 per cent) of respondents are taking advantage of income tax
breaks. The survey also indicated that most paid employees are unaware of the advantages of
tax-saving investments such as ULIPs, NPS, and NSC. Popular investment alternatives include
life insurance, health insurance, FDs, and PPFs. Most paid employees follow the advice of their
spouses or family members since they are the most trusted persons. Respondents have also
made their own decisions to make their own decisions.
Conclusions and Suggessions
Tax preparation is merely one aspect of a larger category known as financial planning. A
financial strategy is more than what meets the eye. A suitable investment strategy that saves
taxes is required for a financial plan to be effective post covid.
Financial preparation not only minimizes the tax burden but also provides mental happiness.
The survey indicates that salaried employees want to understand their tax obligations and the
financial planning tools available to them to make the greatest use of their earnings by lowering
tax incidence. Thus, Financial Planning is not difficult and can be accomplished with
knowledge and effort.
It is recommended to determine necessities, goals, and savings to deal with challenges. Most
professionals earn more than ordinary employees, such as doctors, lawyers, and business
owners. However, compared to other employees, their tax payment is very low or non-existent.
After all of this, the key pillars of an effective investment may be expressed as follows: Save
consistently, Invest frequently, begin saving at the start of year, Spread investment, Use tax
shelters, track an eye on investments and make changes as appropriate.
Acknowledgment
Special thanks to respondents of the survey who shared their valuable inputs on the topic.

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