A PROJECT REPORT ON STUDY OF TAX SAVING SCHEMES OF A SALARIED PERSON

AT Invest Ascent Wealth Advisors Pvt. Ltd. Mumbai

BY GOURAB BHOWAL

UNDER THE GUIDENCE OF Dr. SUBODH JOSHI

SUBMITTED TO UNIVERSITY OF PUNE

In partial fulfillment of the requirement for the award of the degree of Master of Business Administration Through Institute of Business Management and Research (I.B.M.R) Chinchwad, Pune 411019
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ACKNOWLEDGEMENT

First and foremost, I would like to thank Invest Ascent Wealth Advisors Pvt. Ltd., true leader in its business domain and recognized as the Best Wealth Advisor and Planner. I am thankful for giving me a chance to work on an excellent project as part of my summer internship. It truly has been a wonderful learning experience.

I wish to thank my project guide and mentor, Mr. Harold Dias (Vice President PWA) for his invaluable support and guidance, without which the project would not have been successful.

The support given by my colleagues and peers was invaluable. They helped me by giving plenty of insights towards the research objectives.

I would also express my deepest sense of gratitude to Mrs. Asha Panchpande, Director and Dr. Subodh Joshi (Project Guide) of Institute of Business Management & Research, Chinchwad and all faculty member and staff of the institute for their continued support throughout the duration of the project without whose expert guidance neither this project would have been completed nor I have acquire the knowledge of business administration.

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DECLARATION

I, Gourab Bhowal student of Institute of Business Management & Research, Chinchwad, hereby solemnly declare that the project titled, Study of Tax Saving Schemes of a Salaried Person is my original work as all the information, facts and figures, procedures in this report are based on my own experience and study during my summer training. Further I also declare that I have tried my best to complete this project with almost sincerity, honesty and accuracy. Even then if any mistakes or errors are found in this project I shall humbly request the reader to inform those errors. Any suggestions regarding this project are most welcome.

Gourab Bhowal Date:

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ABBREVIATIONS

ITR: AOP: BOI: HUF: U/S: Pvt.: Ltd.:

FBT : STT: CEVAT: CBDT: CBEC: ELSS: HRA:

Income Tax Return. Association of Person. Body of Individuals. Hindu Undivided family. Under Section. Private. Limited.
Fringe Benefit Tax. Securities Transactions Tax. Central Value Added Tax. Central Board of Direct Taxes. Central Board of Excise and Customs. Equity linked saving scheme. Housing Rent Allowances.

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INDEX

Serial No.
1 2 3 4 5 6 7 8 9 10 11 13 14 15 16 17

Chapters
Introduction Reasons for Selecting the Topic Company Profile Industry Profile Overview of Taxation Scope of Study Objective of Project Research Methodology Data Interpretation Theoretical Background Observations & Findings Limitations Suggestions Conclusions Bibliography Questionnaire

Page No.
6-8 9 10 - 14 15 - 16 17 - 19 20 21 22 - 23 24 - 30 31 - 39 40 41 42 43 44 45 - 47

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INTRODUCTION
Taxes in India are levied in India by the central government, state government and the local governing bodies like the Municipality and the Local Council. In a developing country like India, the government has to make fiscal policies to promote the economic growth and development of the country. In order to materialize these policies the government needs capital and for this taxes are levied from individuals and businesses. So it is very important that every citizen should pay tax to the government. There are different types of taxes; they are as follows:

Direct Tax

Income Tax: This is one of the most common types of tax and most of you would be familiar with it. This tax is deducted directly from your income if your income exceeds the taxable limit. Capital Gains Tax: This tax is levied if you sell your property, bonds, shares, jewelry, or anything that gives you profit. The profit can be calculated by deducting the total amount you get by selling your asset and the amount you paid for it. You have to pay tax on the profit. Securities Transactions Tax: When you buy or sell a stock form the share market, you have to pay Securities Transaction Tax. This tax is imposed by the Government because the most of the people who earn their profits from the share market do not declare their assets. As a result, they can avoid paying capital gain tax, as the government can levy tax only on the profits they earn, if these are not declared. The Securities Transactions Tax or STT is levied on derivative instruments, equity shares, equity oriented mutual funds etc. Perquisite Tax: Perquisite Tax (earlier Fringe Benefit Tax or FBT) is levied to employees for the non-monetary benefits given to them by their employers. For example, if your company gives you non-monetary benefits life a rented apartment, a car with a driver; you would have to pay tax for it. This tax was earlier borne by the employers.

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Corporate Tax: These taxes are paid by the companies to the Government of India and it is levied on the income of the corporate. Apart from the corporate tax, they also have to pay other kinds of taxes.

Indirect Tax

Sales Tax: When you buy any commodity, you have to pay its cost price plus the sales tax. The manufacturer then pays the tax to the Government. In India this kind of tax is paid to both the state government (Sales Tax) and the central government (Central Sales Tax). The Sales Tax is levied only on the intra-sale of commodities (sale within one state). The Central Tax is levied for inter -state sales (sales within states). Apart from the Sales Tax, there may be additional tax that can be levied on the sale of a commodity. Service Tax: When you avail services you have to pay tax on it and this is called Service Tax. This tax was introduced in 1994 and is now applicable on every type of services, except the negative list of services and is applicable in all the states, except Jammu and Kashmir. Some of the services for which you have to pay taxes include, advertising, beauty saloon, health care, financial services, etc. Customs Duty and Octroi: This tax is levied on the goods imported into the country as well as the goods that are exported to any other foreign country. It is charged at the entry point of the country like airport, docks etc. The Octroi Tax is levied for goods that are transported from one municipality to another. Excise Duty: The Excise Tax or the Central Value Added Tax (CEVAT) type of tax is levied on the goods that are produced within the country. Anti Dumping Duty: When goods are exported from one country to another at a price that is lower than the actual price of that commodity, then the government charges anti-dumping duty tax on it.

Other Taxes

Professional Tax: If you are a working in a private organization, you have to pay this tax and it would be deducted by your employer from your salary. The rate of this tax may vary from one state to another. Municipal Tax: You have to pay this tax to the municipal corporation if you own a property. Entertainment Tax: When you buy tickets to watch a movie or a show, exhibition, you have to pay Entertainment Tax for it.

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Stamp Duty, Registration: When you buy a property, you have to pay this tax in addition to the cost fixed by the seller, if you want to have the property transferred t your name. Gift Tax: If you get gift that is more than Rs 50,000 in a year, you will have to pay gift tax for it. Toll Tax: You have to pay this tax if you use the infrastructure like the roads, highways etc. to maintain them in the long run.

Some other kinds of taxes include education tax, dividend distribution tax and wealth tax. Various kinds of taxes have become an important part of development of a nation. These taxes help in the implementation of various economic policies to promote the growth of a country. So they help in providing economic stability and also tend to reduce unemployment rate in a country. Although people complain about paying taxes, a well planned taxation system is quite essential for a government.

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REASON FOR SELECTING THE TOPIC

Essential for todays worldWith the ever changing dynamic world it is important for everybody to pay the income tax though it may be through Manual Filing or through E-filing of Income Tax Returns.

Importance of Direct Taxes (DT): Equality (both horizontal & vertical) maintain under direct taxation.

Direct Tax reduces income inequality which brings adequate social and economic justice.

It maintains Certainty to the tax payer about how much to pay as tax.

It helps to control inflation by increasing tax rate, which thereby reduce consumption demand, and in turn reduce inflation.

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COMPANY PROFILE

INVEST ASCENT (We Partner Your Dreams)

Invest Ascent formed by veteran private bankers with an aim of creating a boutique wealth advisory firm to provide a professional platform of private wealth management services. Our core team has more than 85 years of hands on experience in the areas of wealth advisory, Private Banking, Treasury Management, Risk Management, Private Equity, Stock Markets and succession planning.

The diverse experience of the core team offers you an unmatched blend of personalized wealth management opportunities. We understand, the greater the wealth the more complex the needs and higher level of personal attention required. We believe that no two clients are alike and one size does not fit all. As an Invest Ascent Client you are the heart of everything you do. You benefit from not just one single advisor but a team each member brings his/her own expertise and experience to bear on your asset. You are proactively provided with up-to-date investment advice and innovative wealth management solutions designed to help you preserve, enhance and grow your wealth.

Our ability to deliver a unique investing experience to our clients in under pinned by our client centric approach and comprehensive industry experience.

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VISION:
To provide best value for money to investors through innovative products Trading/Investment strategies. State of the art technology and personalized services

MISSION:
To create long term value by empowering individual investors through superior financial services supported by culture based on highest level of teamwork, efficiency and integrity.

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MANAGEMENT OF INVEST ASCENT Anuja Agrawal Managing Director She is the co-founder of Invest Ascent. She has 9 years of experience behind her in the
areas of Private Banking and Wealth Management. She started her career in 2002 with HDFC Bank as a part of the corporate team in Delhi. She was also a part of the wealth management team in Wealth Advisors India Pvt. Ltd. managing the complete wealth of High Networth Individuals. She joined HSBC Invest direct Securities India Ltd (formerly known as IL&FS Investsmart Securities Ltd) in 2007 as a head of the Investment Advisory Group of Bangalore. She has worked for more than 2 years with ILFS Investsmart and her last assignment with the organization was Associate Vice President and heading the investment group for South 1.

Subramanyam S Director
Founder and CEO of Ascent, has close to two decades of experience in Finance, Legal and Business Management, having worked in these areas in various corporate before venturing to be an entrepreneur by setting up Ascent - a company focused on outsourcing services in HR / Finance. He is credited with moving Ascent up in the value chain into an Information Technology Solutions and Services Company while enlarging the outsourcing services business across India...past work experience includes exposures in Advani Oerlikon group, Shonk Technologies, Integrated Enterprises group in corporate finance, HR and corporate legal services.

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PRODUCTS
Invest Ascent has been expressly created to offer an enhanced level of service to demanding individuals. Your Private Wealth Advisors are backed by the product team to assist them in delivering a unique investing experience to all our clients. To service our clients in a flawless way, we have comprehensive range of the financial products in our bouquet. This helps your Private wealth advisors to provide an unbiased advice as per your financial aims. Attention is given to every fine detail in the crafting of innovative products with a comprehensive range of financial planning and wealth management capabilities to deliver a unique investing experience to you.

Mutual Fund Direct Equity Life Insurance General Insurance Group Insurance Real Estate / Art Funds Customized Structured Products Portfolio Management Services

Exchange Trade Funds Capital Protection Products Corporate Fixed Deposit Postal and Small Savings Scheme Margin Trade Funding Loan Against Shares / Mutual Funds Corporate Financing

Invest Ascent also helps with following services:

Tax E Filing:
Invest Ascent focuses on corporate employees needing in-depth guidance & advice with respect to their tax planning eventually culminating in proper tax filing through the e-filing portal Tax Savvy. Invest Ascent endeavors to make the tax filing process as easy as a click of a button.

Tax Advisory Services:

Invest Ascent assist all his clients in tax saving and advisory. The different ways Invest Ascent supports on tax advisory are as follows: Mail Support. Call Support. Personal tax and Wealth Advisors. Corporate presentations.
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Corporate help desk. Financial Planning.

Succession Planning.

Corporate Services:
At the heart of many wealthy lives is a highly-valued business. Having helped your

business prosper and grow, its future becomes a significant consideration. Every business is different, but there are a number of common themes.

Treasury Management. Risk Management. Corporate Finance and Debt Syndication.

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INDUSTRY PROFILE

FINANCIAL SERVICES INDUSTRY

There is a potential source of confusion regarding careers in finance. On the one hand, there is a function called finance that is common to all business enterprises, in every industry. On the other hand, there is a financial services industry. The primary focus of this guide site is on the latter definition. Additionally, note that the finance function is one of many possible career paths within the financial service industry.

INDIA'S FINANCIAL SERVICES INDUSTRY

An innovative, competitive and thriving financial services industry in any country plays a vital role in its smooth functioning and development. India's financial services sector has posited a stable growth curve over the years driven by sound fundamentals, rising personal incomes corporate restructuring, financial sector liberalization and the growth of a consumer-oriented, credit-oriented culture. This has led to the increasing demand for financial products, including consumer loans (especially for cars and homes), as well as for insurance and pension products. The soaring demand for financial services offers promising investment prospects. According to the Central Statistical Organization (CSO) data, released early this year, financial services, banking, insurance and real estate sectors rose by 9.7 % 2009-10.

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FINANCIAL SERVICES INDUSTRYS GROWTH POTENTIAL

The financial industry, or financial services industry, includes a wide range of companies and institutions involved with money, including businesses providing money management, lending, investing, and insuring and securities issuance and trading services. The following institutions are a part of the financial industry:

Banks Credit card issuers Insurance companies Investment bankers Securities traders Financial planners Security exchanges

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OVERVIEW OF TAXATION
Taxation in India: Taxes in India are levied by the Central Government and the state governments. Some minor taxes are also levied by the local authorities such the Municipality. The authority to levy a tax is derived from the Constitution of India which allocates the power to levy various taxes between the Centre and the State. An important restriction on this power is Article 265 of the Constitution which states that "No tax shall be levied or collected except by the authority of law. Therefore each tax levied or collected has to be backed by an accompanying law, passed either by the Parliament or the State Legislature.

Tax structure in India: Like many developed countries in the world, India has a well-developed and diversified tax structure, with the authority to levy taxes divided between the Central government and the State Governments. The various types of taxes levied by these Governments are divided into two broad categories: Direct and Indirect taxes. Direct taxes are those, which are collected directly from the tax-payers through levies such as income-tax and wealth-tax, whereas Indirect taxes comprise Excise duty, Sales tax, Customs duty, Value Added Tax (VAT), Octroi, Entry tax, Service tax, Expenditure tax, etc. The table below gives a list of the major direct and indirect taxes in India and the authorities responsible for administrating these laws: Nature of Taxes Direct tax Income tax Wealth tax Income-tax Act, 1961 Wealth-tax Act, 1957 Central Board of Direct Taxes (CBDT) Governing Act Act Authority

Indirect tax Central Excise Customs Central sales tax State sales tax Central Excise Act, 1944 Customs Act, 1962 Central Sales Tax Act, 1956 Respective State Sales Tax Act/ Value Added Tax Acts. Respective State Government Central Board of Excise and Customs (CBEC) Central Government

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INCOME TAX RATES : Applicable to an individual for the Assessment Year 2013-2014 I.e. for the Financial Year 2012-2013

FOR THE RESIDENT SENIOR CITIZEN : (Who have completed 60 years of age during previous year at any time but not 80 years)

Up to Rs. 2,50,000 Rs. 2,50,000 Rs. 5,00,000 Rs. 5,00,000 Rs. 10,00,000 Rs. 10,00,000 and above Education Cess 2% of Income Tax

Nil 10% 20% 30%

Secondary and Higher Secondary Education 1% of Income Tax Surcharge Nil

FOR THE RESIDENT SUPER CITIZEN: (Who have completed 80 years of age during the previous year at any time)

Up to Rs. 5,00,000 Rs. 5,00,000 Rs. 10,00,000 Rs. 10,00,000 and above Education Cess 2% of Income Tax

Nil 20% 30%

Secondary and Higher Secondary Education 1% of Income Tax Surcharge Nil

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FOR ANY OTHER INDIVIDUAL: [For all non-resident individual (A.O.P), (B.O.I), (H.U.F)]

Up to Rs. 2,00,000 Rs. 2,00,000 Rs. 5,00,000 Rs. 5,00,000 Rs. 10,00,000 Rs. 10,00,000 and above Education Cess 2% of Income Tax

Nil 10% 20% 30%

Secondary and Higher Secondary Education 1% of Income Tax Surcharge Nil

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SCOPE OF STUDY

The project Study of Tax Saving Schemes of a Salaried Person has a deep scope of learning & analyzing the tax saving behavior of an individual for me and the company, which could help in better understanding of individual choices & can lead to further awareness if required. The concept of E-Filling and its importance was clearly understood. From my research the company was able to understand whether they need more promotion so as to reach maximum clients. This study helped me in interacting with different people & analyzing their problems regarding Taxation. It also helped me in learning an organizational internal behavior & managing people all at a time.

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OBJECTIVE OF THE PROJECT

Followings are the two heads of Objectives that I wanted to analyse from this project report:

Primary Objectives: To find out the maximum number of exemptions that an employee applies for a financial year. To find out the maximum preferred mode in selection of filling Income Tax Returns (ITR). To analyse the benefits that an employee receives by paying Taxes.

Secondary Objectives:

To find out the number of employees pay their taxes.

To find out whether an employee has filled their Income Tax Return for the assessment year 2013 2014.

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RESEARCH METHODOLOGY
This report is based on primary as well as secondary data; however primary collection was given more importance. One of the most important uses of Research Methodology is that it helps in identifying the problems, collecting, analyzing the required information data and providing an alternative solution to the problem. It also helps in collecting the vital information that is required by the top management to assist them for the better decision making for both day to day decisions and critical ones.

DATA SOURCES Research is totally based on primary data and Secondary data. Primary data are the data collected by the investigator conducting the research, whereas Secondary data are the data collected by someone other than the investigator. Common sources of secondary data for social science include censuses, organizational records and data collected through qualitative methodologies or qualitative research. Research has been done by Primary data collection and the data has been collected by interacting with the peoples from five different companies i.e. Barclays, Siemens, WNS, MindTree, Suzlon Energy Ltd. Secondary data has been collected through various journals and websites.

DURATION OF THE STUDY The study was carried out for the period of two months.

SAMPLING METHOD The sampling which is used in my project is Simple Random Sampling. A Simple Random Sampling is a subset of individuals (a sample) chosen from a larger set (a population). Each individual is chosen randomly and entirely by chance, such that each individual has the same probability of being chosen at any stage during the sampling process, and each subset of k individuals has the same probability of being chosen for the sample as any other subset of k individuals. This process and technique is known as Simple Random Sampling, A simple random sample is an unbiased surveying technique.

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SAMPLING PROCEDURE The sample was selected from the employees of five different companies through personal visit to the people by formal and informal talks and through filling up the questionnaire prepared.

SAMPLE SIZE Size of sample means the number of sampling units selected from the population for investigation. The sample size is 100 clients.

TOOLS USED Pie chart

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DATA INTERPRETATION

1. In which age group do you fall? Age 20 Age 30 Age 40 Age 50 Age 30 Age 40 Age 50 & above

Age Group
0% 11% Age 20 Age 30 Age 30 Age 40 52% Age 40 Age 50 Age 50 & above

37%

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2. In which Tax slab bracket do the maximum employees fall for the Assessment Year 2013-2014 Up to 2Lakh 5Lakh 10 Lakh 2Lakh 5 Lakh 10Lakh and above

Income Tax bracket of the individuals

0% 26%

up to 2Lk
46% 28%

2Lk - 5Lk 5Lk - 10 Lk 10Lk & ABOVE

INTERPRETATION: 0% of the employees fall under the Tax slab of Up to Rs.2 lakh. 46% of the employees fall under the Tax slab bracket of Rs.2 lakh Rs.5 lakh. 28% of the employees fall under the Tax slab bracket of Rs.5 lakh Rs.10 lakh. 26% of the employees fall under the Tax slab bracket of Rs.10 lakh & above.

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3. Have you paid your tax? YES NO

Tax Payer
4%

YES

NO

96%

INTERPRETATION: 96% of the employees had paid their taxes by 29th of July, 2013 4% of the employees were yet to pay their taxes by 5th of August, 2013

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4. Through which mode did the employees filled their Income Tax Returns? E-FILLING MANUAL FILLING

Mode of Filling IT Returns

7%

E-FILLING MANUAL FILLING

93%

INTERPRETATION:

93% of the employees choose to file their Income Tax Return through E-Filing mode. 7% of the employees choose to file their Income Tax Return through Manual Filing mode.

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5. Do you apply for the deductions exempted for House Rent Allowances (HRA)? YES NO

HRA
13%

YES
87%

NO

INTERPRETATION: 87% of the employees apply for the deductions exempted for House Rent Allowances (HRA) 13% of the employees dont apply for the deductions exempted for House Rent Allowances (HRA)

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6.

Exemptions that an employee apply for? PAYMENT TO PENSION SCHEME DONATIONS MEDICAL INSURANCE PREMIUM INVESTMENT IN MUTAL FUNDS ELSS

INSURANCE PREMIUM EDUCATIONAL LOAN REPAYMENT

PERCENTAGE OF EXEMPTION
INSURANCE PREMIUM &EDUCATIONAL LOAN REPAYMENT INSURANCE & MUTUAL FUNDS
41% 39%

3% 12% 5%

MEDICAL & EDUCATIONAL LOAN

PENSION & MEDICAL

DONATIONS & MUTUAL FUNDS

INTERPRETATION: 41% of the employees apply for the exemptions of both Insurance premium & Education loan repayment. 39% of the employees apply for the exemptions of both Insurance premium & Mutual funds. 12% of the employees apply for the exemptions of both Medical insurance & Educational loan repayment. 5% of the employees apply for the exemptions of both Pension & Medical insurance. 3% of the employees apply for the exemptions of both Donations & Mutual funds.

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7. Other sources of Income for an employee? FIXED DEPOSITS POST OFFICE MONTHLY INCOME SCHEMES BONDS/DEBENTURES ANY OTHER INCOME SAVINGS BANK ACCOUNT

Other Sources of Income

4% 0% 13% 13%

FIXED DEPOSITS & BONDS

BONDS & SAVINGS BANK A/C

FIXED DEPOSITS & SAVINGS BANK A/C
70%

SAVINGS BANK A/C & P.O MONTHLY INCOME FIXED DEPOSIT & P.O MONTHLY INCOME

INTERPRETATION: 0% of the employees have Fixed deposits & Bonds as other sources of income. 13% of the employees have Bonds & Savings bank a/c as other sources of income. 70% of the employees have Fixed deposits & Savings bank a/c as other sources of income. 13% of the employees have Savings bank a/c & Post office monthly income as other sources of income. 4% of the employees have Fixed deposits & Post office monthly income as other sources of income.

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THEORITICAL BACKGROUND

DEDUCTIONS UNDER CHAPTER VIA

In computing the total income of an assessee, deductions specified under sections 80C to 80U will be allowed from his Gross Total Income {Sec. 80B (5)} in accordance with and subject to the provisions of this Chapter. However, the aggregate amount of deductions under this chapter shall not, in any case, exceed the gross total income of the assessee. Where in computing the total income of an assessee, any deduction admissible under section 80-IA or 80-IABor section 80-IB or section 80-IC or Section 80-ID or section 80-IE shall not be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub section (1) of section 139 (section 80AC)

SECTION 80C DEDUCTION IN RESPECT OF LIFE INSURANCE PREMIA, DEFERRED ANNUITY, CONTRIBUTIONS TO PROVIDENT FUND, SUBSCRIPTION TO CERTAIN EQUITY SHARES OR DEBENTURES, ETC. (W.E.F. ASST. YEAR 2007-2008). 1. As Life Insurance premium to effect or keep in force insurance on life of (a) self, spouse and any child in case of individual and (b) any member, in case of HUF. Insurance premium should not exceed 20% of the actual capital sum assured.

2. As contribution (not being repayment of loan) by an individual to Statutory Provident Fund; i.e., any provident fund to which the Provident Funds Act, 1925, applies. 3. As contribution to Public Provident Fund scheme, 1968, in the name of self, spouse and any child in case of individual and any member in case of HUF. 4. As contribution by an employee to a recognised provident fund. 5. As contribution by an employee to an approved superannuation fund. 6. Any sum deposited in a 10 year or 15 year account under the Post Office Savings Bank (CTD) Rules, 1959, in the name of self and as a guardian of minor in case of individual and in the name of any member in case of HUF. 7. As tuition fees (excluding any payment towards any development fees or donation or payment of similar nature), to any university, college, school or other educational institution situated within India for the purpose of full-time education of any two children of individual.
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8. As subscription to equity shares or debentures forming part of any eligible issue of capital of public company or any public financial institution approved by Board.

Persons Covered Individual / HUF. Eligible Amount Any sums paid or deposited in the previous year by the assessee.

Relevant Conditions/Points 1. No deduction shall be allowed to assessee in the previous year of happening of following events (referred henceforth as "such previous year") and the aggregate amount of deductions of income so allowed in respect of the previous years preceding such previous year shall be deemed to be the income of the assessee of such previous year and shall be liable to tax in the assessment year relevant to such previous year; i.e., If the assessee: (a) Terminates the contract of insurance (referred in item 1 above), by notice to that effect or if the contract ceases to be in force by reason of failure to pay any premium, by not reviving the contract of insurance, in case of any single premium policy, within 2 years or in any other case before the premiums have been paid for 2 years. (b) Terminates the participation in any ULIP plan (referred in item 10 above) by notice to that effect or ceases to participate by reason of failure to pay any contribution, by not reviving his participation, before contributions in respect of such participation has been paid for 5 years. (c) Transfers his house property (referred in item 17 above) before the expiry of 5 years from the end of the financial year in which possession of such property is obtained or receives back, whether by way of refund or otherwise any sum specified in that clause. (d) Sales or transfers any equity shares or debentures (referred in item 18 above) to any person at any time within a period of 3 years from the date of their acquisition (i.e., date on which assessees name is entered in the register of members or debenture holders). (e) Withdraw any amount (referred in item 21 and 22 above) including interest accrued thereon, before the expiry of the period of five years from the date of deposit. The amount of interest withdrawn will not be taxable in the year of withdrawal if the same has been including in the total income of the assessee of an earlier year.

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2. Any sum paid or deposited as above need not be out of current years income but should not exceed the total income of the relevant previous year.

Extent of Deduction 100% of the amount invested or Rs. 1,00,000/- whichever is less. However, as per Section 80CCE, the total deduction the assessee can claim u/ss. 80C, 80CCC and 80CCD(1) shall be restricted in aggregate to Rs. 1,00,000/-.

SECTION 80CCC DEDUCTION IN RESPECT OF CONTRIBUTION TO CERTAIN PENSION FUNDS Persons Covered Individual. Eligible Amount Deposit or payment made to LIC or any other insurer in the approved annuity plan for receiving pension. Relevant Conditions/Points 1. The amount should be deposited or paid out of taxable income. 2. No deduction u/s. 80C is allowed on investment or expenditure on which deduction is claimed under this section. 3. Any amount withdrawn or pension received from the plan is taxable in the hands of the assessee or nominee in the year of receipt. 4. The amount of interest or bonus accrued or credited to the assessees account is not to be regarded as amount paid.

Extent of Deduction Least of amount paid or Rs. 1, 00,000/- . Refer Note on extent of deduction in Section 80C.

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SECTION 80CCD DEDUCTION IN RESPECT OF CONTRIBUTION TO PENSION SCHEME OF CENTRAL GOVERNMENT Persons Covered Individual in the employment of Central Government or any other employer on or after 1-1-2004 or any other assessee being an individual. Eligible Amount Deposit or payment made by the employee and Central Government or individual under a pension scheme notified by the Central Government. Relevant Conditions/Points 1. No deduction is allowed u/s. 80C in respect of contribution claimed as deduction under this section. 2. Any amount received from the scheme either on closure or on the event of opting out of the pension scheme, is taxable in the hands of the assessee or nominee in the year of such receipt. 3. Salary for the purpose of this section includes dearness allowance, if the terms of employment so provide, but excludes all other allowances/perquisites. 4. For the purposes of these section, the assessee shall be deemed not to have received any amount in the previous year if such amount is used for purchasing an annuity plan in the same previous year. Extent of Deduction A) Aggregate of (a) Amount paid or deposited by the employee and (b) Amount paid or deposited by the Central Government. The total deduction shall be restricted to maximum 10% of salary. B) Amount deposited by individual, subject to 10% of total income, in a previous year.

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SECTION 80D DEDUCTIONS IN RESPECT OF MEDICAL INSURANCE PREMIA Persons Covered Individual/HUF Eligible Amount Premium paid on Mediclaim Policy issued by GIC or any other insurer approved by IRDA (Insurance Regulatory and Development Authority). Relevant Conditions/Points 1. 2. The amount should be paid by any mode other than cash out of taxable income. (a) Insurance on the health of the self, spouse, parents or children of the assessee in the case of Individual or (b) Insurance on the health of any member if the assessee is HUF.

Extent of Deduction For Individual For taxpayer his/her spouse and dependent children: 100% of premium paid subject to ceiling of (a) Rs. 20,000/- in the case of premium paid in respect of senior citizen (who has attained the age of 65 years or more) and (b) Rs. 15,000/- in other cases. Additional deduction for parents of the taxpayer whether dependent or not 100% of premium paid subject to ceiling of (a) Rs. 20,000/- in the case of premium paid in respect of senior citizen (who has attained the age of 65 years or more) and (b) Rs. 15,000/- in other cases.

From Assessment year 2011-12, the benefit of deduction will be extended to the contribution made to Central Government Health Scheme. However, the aggregate limit for deduction remains the same.

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SECTION 80DD DEDUCTION IN RESPECT OF MAINTENANCE INCLUDING MEDICAL TREATMENT OF HANDICAPPED DEPENDANT Persons Covered Resident Individual / HUF. Eligible Amount (a) Expenditure incurred on medical treatment [including nursing], training and rehabilitation of a disabled dependant, or (b) Any payment or deposit made under a scheme framed by LIC or any other insurer or the administrator or the specified company and approved by the Board for payment of lump sum amount or annuity for the benefit of dependant with disability. Relevant Conditions/Points 1. The concerned assessee must attach a copy of certificate in the prescribed Form and signed by prescribed medical authority along with return of income filed u/s 139. A fresh medical certificate may be required to be submitted after the expiry of stipulated period depending on the condition of disability as specified in such certificate. 2. Dependant means (a) in case of an individual, the spouse, children, parents, brothers and sisters of such individual and (b) in the case of a Hindu Undivided Family, any member of HUF; and who is dependant wholly or mainly on such individual or HUF for support and maintenance and who has not claimed deduction under section 80U for the assessment year relating to previous year. 3. "Disability" has the same meaning assigned to it in Section 2(i) of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 [hereinafter referred to as PDEOPRFP Act] and includes "autism", "cerebral palsy" and "multiple disabilities" referred to in clauses (a), (c) and (h) of Sec. 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 [NTWPACMRMD Act]. 4. "Person with Disability" means a person as referred to in Sec. 2(f) of the PDEOPRFP Act or Sec. 2(j) of NTWPACMRMD Act. 5. "Person with Severe Disability" means a person suffering from 80% or more of one or more disabilities prescribed u/s. 56(4) of PDEOPRFP Act or u/s. 2(o) of NTWPACMRMD Act. 6. If such dependant predeceases the individual or the member of HUF in whose name the subscription is made in the scheme, the amount shall be taxable in the hands of the concerned assessee in the year of receipt.

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7. The assessee can nominate (a) disabled dependant or (b) any other person or (c) a trust, to receive the payment from the scheme for the benefit of disabled dependant. Extent of Deduction (a) Rs. 50,000/- in case of normal disability or (b) Rs. 100,000/- in case of severe disability.

SECTION 80E DEDUCTION IN RESPECT OF INTEREST ON LOAN TAKEN FOR HIGHER EDUCATION Persons Covered Individual. Eligible Amount Any amount paid by way of interest on loan taken from any financial institution or any approved charitable institution for his/her higher education or w.e.f. 1-4-2008 for the purpose of higher education of his/her spouse, children and legal guardian of the Individual. Relevant Conditions/Points 1. Amount should be paid out of income chargeable to tax. 2. All field of studies including vocational studies pursued after passing the senior secondary examination or its equivalent from any school, board or university recognized by the central govt. or state govt. or local authority or by any other authority authorised by the central govt. or state govt. or local authority to do so. 3. Approved charitable institution means an institution established for charitable purposes and notified by the Central Government u/s. 10(23C) or referred in 80G(2)(a). 4. Financial institution means banking company or financial institution notified by Central Government. 5. The deduction is allowed in the initial assessment year (i.e., the assessment year relevant to the previous year, in which the assessee starts paying the interest on loan) and 7 assessment years immediately succeeding the initial assessment year or until the interest is paid in full whichever is earlier. Extent of Deduction Entire amount of interest.

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SECTION 80G DEDUCTION IN RESPECT OF DONATIONS TO CERTAIN FUNDS, CHARITABLE INSTITUTIONS, ETC. Persons Covered All assessees [except for 80G (2)(c), which is applicable for donations made only by company] to the Indian Olympic Association or to any other Association or Institution for the development of infrastructure for sports & games or the sponsorship of sports & games, in India. Eligible Amount Any sums paid in the previous year as Donations to certain funds, charitable institutions etc. specified u/s. 80G(2). Relevant Conditions/Points 1. Donation in kind is not eligible for deduction. 2. Donations paid out of another years income or out of income not includible in the assessment of current year are also eligible for deduction. Lt. F. No. 45/313/66 ITJ (61) dt. 212-1966. Extent of Deduction Without any ceiling of 10% of adjusted Gross Total Income: (a) 100% of donation if donation given to National Defence Fund set up by the Central Government; Prime Ministers National Relief Fund; Prime Ministers Armenia Earthquake Relief Fund; Africa (Public Contributions India) Fund; National Foundation for Communal Harmony; An approved university/educational institution of National eminence; The Maharashtra Chief Ministers Relief Fund during October 1, 1993 and October 6,1993; Chief Ministers Earthquake Relief Fund, Maharashtra; Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat; any Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district; National Blood Transfusion Council or to any State Blood Transfusion Council; any fund set up by a State Government for the medical relief to the poor; the Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief Ministers Cyclone Relief Fund, 1996; National Illness Assistance Fund; Chief Ministers Relief Fund or Lieutenant Governors Relief Fund in respect of any State or Union Territory; National Sports Fund; National Cultural Fund; Fund for Technology Development and Application; National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities; Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of earthquake in Gujarat (contribution made during January 26, 2001 and September 30, 2001) or

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(b) 50% of donation if donation given to Jawaharlal Nehru Memorial Fund; Prime Ministers Drought Relief Fund; National Childrens Fund; Indira Gandhi Memorial Trust; Rajiv Gandhi Foundation. With ceiling of 10% of adjusted Gross Total Income: Where the aggregate of sums exceed 10% of adjusted gross total income, then such excess amount is ignored for computing such aggregate. (a) 100% of qualifying amount, if donation given to Government or any approved local authority, institution or association to be utilised for the purpose of promoting family planning; Donation by a Company to the Indian Olympic Association or to any other notified association or institution established in India for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India. (b) 50% of qualifying amount if donation given to any other fund or any institution which satisfies conditions mentioned in Section 80G(5); Government or any local authority to be utilized for any charitable purpose other than the purpose of promoting family planning, Any authority constituted in India for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns, villages or both; Any corporation referred in Section 10(26BB) for promoting interest of minority community; For repairs or renovation of any notified temple, mosque, gurudwara, church or other place.

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OBSERVATIONS & FINDINGS

From my experience in interacting with the employees of the five different companies i.e. Barclays,WNS, Siemens, Mind Tree and Suzlon Energy Ltd. For two months, I can conclude with following observations: Employees were more interested in investing their money in various sectors to get tax benefits. Employees were more interested in filling their Income Tax Returns through E-Filling rather than Manual Filling. As E-Filing has been mandatory for an individual earning Rs.5 Lakh & above. Employees prefer to have Fixed Deposit A/c & Saving Bank A/c more other than any other sources of capital gain. Employees try to get tax benefits by getting exemptions from Insurance Premium, Education Loan Repayment & by investing in Mutual Funds.

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LIMITATIONS

From my experience during the internship I had to face many challenges which partially could be overcome & partially not. Time Constraints: As the area was too large it was very difficult to cover the entire area in limited period of time for two months.

Errors of data: Some time the data given by the client is incomplete or wrong, so it may cause errors in the computations.

Ineffective Planning: As there was no effective planning it is very difficult for researcher to reach the targeted client within the time which leads to waste the time of clients.

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SUGGESTIONS

From my 2 months experience during the internship I observed many changes that are to be taken or need to be improved for the company so as to maintain the best position and give the competitors a tough competition. Invest Ascent should provide free tax counseling to its clients, to make the clients aware of various Taxation rules.

The company should advance their technology, by providing information through Mails, SMS, and Phone calls.

The company should try to reach more target people by approaching different companies.

The company has to be more dedicated in keeping the words, by providing the ITR-V forms at the right time.

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CONCLUSION

From the research conducted so far I can conclude that: Taxation is the most important aspect of any individual which everyone has to look very carefully.

The deep knowledge of each & every aspect of the taxes related to an individuals are very important because even if we miss a single aspect of taxation it will be very hard for us to handle taxation because it could result in over tax payment, avoidance of evasion.

Tax evasion is a wrong practice which should be avoided; it may result in penalty for the tax dodging.

At last I would like to conclude with the remarks that taxation is the backbone of Indian Economic System, so it should be handled with lot of care & with responsibility.

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BIBLIOGRAPHY

BOOKS

Author T.N. Manoharan Dr. Singhania

Name of the Book Income Tax Laws Central Sales Tax Covered Student guide to Income Tax

Edition 12th edition,2007 16th edition, Taxman,2003 4th edition, Tata McGraw Hill Education,2009

Hariharan

Income Tax: Laws & Practice

WEBSITES

http://www.investascent.com/ http://www.gsoftnet.blogspot.in/2012/12/limit-for-deductions-under-chapter-vi.html www.incometaxindiaefilling.gov.in

https://incometaxindiaefiling.gov.in/portal/selectforms.do

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QUESTIONNAIRE
Good morning /afternoon/evening, my name is Gourab Bhowal, I am from Invest Ascent Wealth Advisor Pvt. Ltd.. Today, we are conducting a survey to find out peoples opinion on Tax Saving Schemes. I am conducting this study for my project report. I would be grateful if you could spare a few minutes to answer some questions.

Respondents name: Gender: Age: Address:

Contact number (M): Personal Email Id: Pan card number: Questions: 1. In which age group do you fall? Age 20 Age 30 Age 40 Age 50

(O):

Age 30 Age 40 Age 50 & above

2. Are you a salaried person? YES (Note: If No terminate the interview)

NO

3. In which company do you work?

4. What is your total Gross Salary? 1Lakh 2 Lakh 5Lakh 10 Lakh

2Lakh 5 Lakh 10Lakh and above

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5. In which Tax slab rate do you fall for the Assessment Year 2013-2014 Up to 2Lakh 2Lakh 5 Lakh 5Lakh 10 Lakh 10Lakh and above

6. Have you filled your Income Tax Returns? YES

NO

7. Through which mode did you filled your Income Tax Returns? E-FILLING MANUAL FILLING

8. Do you apply for the deductions exempted for House Rent Allowances (HRA)? YES NO (Note: If No then move to question no. 8)

9. Are you aware about the deductions exempted under Chapter VIA (i.e. Sections 80C, 80CCC, 80CCD, 80D, 80E, 80G)? YES NO (Note: If No move to question no. 10)

10. If yes then what are the exemptions you apply for? INSURANCE PREMIUM PAYMENT TO PENSION SCHEME EDUCATIONAL LOAN DONATIONS REPAYMENT

MEDICAL INSURANCE PREMIUM INVESTMENT IN MUTAL FUNDS ELSS

11. Are there any other sources of your Capital Gain? YES (Note: If No move to question no. 12)

NO

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12. If yes then what are the sources? FIXED DEPOSITS BONDS/DEBENTURES POST OFFICE MONTHLY INCOME SCHEMES ANY OTHER INCOME

SAVINGS BANK ACCOUNT

13. Number of Jobs Changed in 1 Financial Year (i.e. 2012-2013) 0 1 MORE THEN 1

Respondent Signature

Date

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