IJIRMPS | Volume 9, Special Issue September 2021 RONC-MPQOPCE ISSN: 2349-7300

A Study on Awareness of Investment in Tax Saving Products

Varsha Singhania

Student
Rishi UBR PG College for Women

Abstract
Tax saving is an important concept as it helps in gaining deductions available from 80 C and other deductions.
This research study helps in identifying how one can gain benefits of Indian tax systems by utilizing various
investment options mentioned under 80 C of IT Act, 1961. This section provides up to Rs. 1,50,000
deductions. These investments include PPF, NSS, NPS, and ELSS etc. The major objective of the study was to
know the respondents awareness on the Tax planning and Tax deductions, the source of awareness and the
reason for preference of Investment. Tax planning helps in the reduction of tax amount and helps in utilizing
the various reliefs, deductions, exemptions and rebates as per the IT Act, 1961. This research aims at knowing
the most preferred tax saving instrument and the reason for its selection based on the mentioned criteria.
Overall findings of the study reveal that 80 C deductions is the most preferred one.

Keywords: Investment, Tax Saving Products, Income Tax Deductions

Introduction
Tax Saving Investments
Individual Taxpayers pay direct as well as Indirect Taxes. If an individual aims to reduce the Tax liability
they can opt for Tax saving Instruments and can utilize the deductions as per Income Tax Act, 1961.

A person whose income is above a certain limit has to file an Income Tax return for Fiscal year. There are
various Investment options that help in the reduction of Tax liability of an individual and can be referred to
as “Tax Saving Products” or “Tax Saving Instruments”.

Objectives of the Study

• To know the respondents awareness on the Tax planning and Tax deductions.
• To know the sources of Awareness about the Investment in Tax Saving Products to the respondents.
• To know the preference of Tax Saving Investments options of the respondents and to know the
preference of respondents on the basis of Lock-down period of Investment, Returns and Taxability.

Literature Review
Bindabel and Hamza, (2021) state that the main objective of the study was to find out the relationship between
saving and investment pattern and orientation towards finance among the working women at the universities
of Saudi Arabia. Orientation towards finance (ORTOFIN) is one's attitude towards effectively managing
financial activities.

Neha Agarwal, (2020) state that tax planning is an essential part of our financial planning. The main
purpose of the study is to find out regarding the awareness and alternatives of the tax planning.

Arora & Garg, (2019) in this research is an attempt to know the awareness and perception regarding

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various tax saving instruments available to save the tax to the teachers of higher education. The teachers are
well aware of the various deductions, reliefs, and rebates available as per the Indian income tax act. They
prefer those options of investment which are having low risk, high returns, and full tax benefits.

Arora & Monika (Research Scholar, 2019) research paper is related with sensitive and personal financial
aspects of individual income tax assesses. the researcher to undertake an empirical research on the topic to
identify the factors that influence the individual assesses to invest in tax-saving schemes and scope for
further investment. Depending upon their risk appetite, an increase has been witnessed in number of
investment avenues available for investors.

Arora & Rathi, (2018) studied the salaried employees’ awareness and perception regarding various tax saving
options. The study used correlation analysis and found a significant difference between the saving and
investment patterns of men and women. Further, risk, return, and saving of tax were found to be the most
important factors for investment decisions. The study also concluded that the medical deduction is
underutilized and the tax rate should be reduced for salaried class.

Research Methodology
The present paper “A Study on Awareness of Investment in Tax Saving Products” is based on primary as well
as secondary data. For primary data a survey was collected for 150 people and secondary data was
collected from various research articles on related topics. The nature of the study was descriptive, sample
size was 150 and data was collected through Questionnaire. The convenient random sampling method was
used for data design and weighted average and Percentage Analysis were the statistical tools used.

Limitations
• It was difficult to obtain the data as the people who file Income Tax Returns were unwilling to give the
information.
• It was difficult for some of the people to fill the deductions they were eligible for as they get the returns
filed by Chartered Accountants and others.
• This study is done with reference to respondents who get their Income Tax File Returns by Agarwal
Ankush & Associates, with the sample size of 150 and therefore dependability of the project is not certain.

Data Analysis
Age

Age Of Respondents

10%
25-35
28%
35-45
36% 45-60

26% 60- Above

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Gender

Gender Of Respondents

44% Male
56% Female

Occupation

Occupation of Respondents
5%
Government
Employee
28% Private Employee

Business
50%
17%
Other

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Annual Income (In Rupees)

Annual Income
Of
Respondents
Below 1,00,000
5%
10% 1,00,000-2,00,000
21%
2,00,000-3,00,000
20%
18% 3,00,000-4,00,000

26% 4,00,000-5,00,000
5,00,000 and Above

Income Tax Returns

Filing of Income Tax Returns by the

Respondents
11
%

Yes
No
89%

Tax Deductions

Respondents Awareness of Tax Deductions

13%
Yes
No

87
%

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Eligibility of Respondents for Deductions Available from Sec 80 C to 80 U

Eligibility Of Respondents
120
100
Eligibility Found
80
60 Percentage of
Responses
40
20
0

Period of Investment in Tax Saving Products

Period of Investment in Tax Saving

Products
7%
5% 0-1
18% 1-5
5-10
33%
37% 10-15
15 years and above

Investment Advice Source

Investment Advice Source

Newspapers and Magazines

8% Family and Friends

Internet
43% 24%
Advisors

Certified Market
Professionals/ Financial
Planners

21
%

4
%

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Returns vs Tax Savings

Preference between Between Return and Tax Savings

60
50
40
30
20
Number of Respondents
10
0 Percentage of Responses

Preference of Investment Options

Preference of Investment Options

80
70
60
50 No Preference(1)
40
30 Slightly Prefer(2)
20
10 Prefer(3)
0
Strongly Prefer(4)
Very Strongly Prefer(5)

Reason for Selection of Investment Avenue

Reason for selecting an Investment Avenue

Returns
23%
46% Tax Deductions

31% Savings for

Uncertainties

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Satisfaction from Investment in Tax Saving Products

Satisfaction from Investment in Tax Saving Products

60
50
40
30
20
Number of Respondents
10
0 Percentage of
Responses

Findings
• On the basis of the study it has been observed that most of the people prefer investing in National
Pension System and have awareness of Tax deductions.
• It has been observed that majority of the respondents were eligible for deductions under Sec 80 C and
do tax planning. On the basis of the study it has been observed that people have a neutral response while
selecting among returns and Tax Savings and also have neutral satisfaction from the Investment which
they make in Tax Savings Products.
• It has been observed that salaried individuals who were the respondents were majorly investing on the
basis of the returns that the Investment Avenue generates and depend on Investment Advice given by
Certified Market Professionals/ Financial Planners.

Conclusion
It can be concluded that the respondents have basic knowledge and awareness about various tax saving
schemes u/s 80 C only and prefer to invest in National Pension System and National Savings Certificate but
are unaware of the various Tax Savings Products that are eligible for deductions and benefits under the
remaining sections ranging from Sec 80 CCD to 80 U.

References
1. Dr.Vinod K Singhania, Dr. Monica Singhania, Students' Guide to Income Tax Including GST,
Taxmann Publications, 4-1-369-Indralok Commercial Complex Shop No. 15/1 – Ground Floor,
Telangana 500001, 356-364.
2. Bindabel and Hamza (2021), ‘Relationship between saving and investment pattern and orientation
towards finance among working women in the universities of Saudi Arabia’, Growing Science,
Canada, Vol. no. 7(1), 81-88. Available from
URL:https://www.researchgate.net/publication/344879958.
3. Neha Agarwal (2020), ‘A study on tax planning of salaried individual’, International
Multidisciplinary Conference in, Technology, Business, Management & Liberal Arts, Vol. no. 9(5),
68-74. Available from URL: https://ijcrt.org/download.php?file=IJCRT2104205.pdf

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4. 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. Available from URL:https://doi.org/10.35940/ijrte.C5847.098319
5. Arora & Monika (Research Scholar, I. P. T. U. (2019), April Month Milestone. ‘Pacific Business
Review International’, 136/2017-2(Monthly). URL:http://www.pbr.co.in/2017/april4.aspx
6. Arora, A. K. & Rathi, P. (2018), ‘A Study of Awareness and Perception Regarding Tax Saving
Options
7. Among Salaried People’, Indian Journal of Finance, 12(7), 57-66. URL:
http://www.indianjournaloffinance.co.in/index.php/IJF/article/view/129971

Annexure - 1 Questionnaire:
A Study on Awareness of Investmentintax Saving Products
1. Name :

2. Age: (a) 25-35 (b) 35-45 (c) 45-55 (d) 55-65 (e) 65 & Above.

3. Gender: (a) Male (b) Female

4. Occupation: (a) Government Employee (b) Private Employee (c) Business (d) Other.

5. Annual Income(In Rupees):

(a) Below 1,00,000 (b) 1,00,000-2,00,000 (c) 2,00,000-3,00,000 (d) 4,00,000-5,00,000 (e) 5,00,000 &
Above.

6A. Do you file Income Tax Returns? (a) Yes (b) No

6B. Are you aware about the Tax Deductions available from Sec 80(C) to Sec 80 (U)? (a) Yes (b) No

6C. Fill in the blank below the Tax Deductions you are eligible for

7. Since how many years have you been investing in Tax Savings Instruments?
(a) 0-1 (b) 1-5 (c) 5-10 (d) 10-15 (e) 15 years and above.

8. Do you prefer Investments having higher returns with low tax deductions or lower returns with higher
deductions?
(a) Higher returns with low tax deductions (b) Lower returns with high tax deductions.

9. What is your Investment Advice Source?

(a) Newspapers and Magazines (b) Family and Friends (c) Internet (d) Advisors (e) Certifies Market
Professionals/ Financial Planners

10. You are looking for a better return from Investments as compared to Tax Savings.
(a) Totally agree (b) Agree (c) Neutral (d) Disagree (e) Totally Disagree

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11A. From the below rank the investment options you prefer:
No Slightly Strongly Very Strongly
Options Prefer
Preference Prefer Prefer Prefer
5 Year Bank FD
PPF
ULIP
NSC
NPS
ELSS

11B. And if you prefer investing in above, what is the major reason for you selecting an investment avenue?
(a) Returns (b) Tax Deductions (c) Savings for Uncertainties.

11C. And are you satisfied from Investment in Tax Saving Products?
(a) Highly satisfied (b) Satisfied (c) Neutral (d) Dissatisfied (e) Highly dissatisfied.

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