Final SIP Report Eknath

A PRPOJECT EPORT ON
“ANALYSIS OF INVESTMENT TOWARDS TAX SAVING PRODUCTS

BY SALARIED INDIVIDUALS UNDER DIFFERENT INCOME SLABS.”
WITH REFERENCE
TO
H&R BLOCK INDIA PVT. LTD
SUBMITTED BY
Yashesh Suryakant Bhansali
(Batch 2018-2020)
UNDERTHE GUIDANCE OF
Prof. SONALI BAGADE.
SUBMITTED TO
SAVITRIBAI PHULE PUNE UNIVERSITY
In the partial fulfilment of the requirement for the award of
Master of Business Administration (MBA)
Through
Dr. D. Y. Patil Unitech Society’s

DR. D.Y. PATIL INSTITUTE OF MANAGEMENT AND RESEARCH,
Sant Tukaram Nagar, Pimpri, Pune – 411018, Maharashtra, India
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Declaration
I, the undersigned, hereby declare that the project report entitled “Analysis of Investment
towards Tax Saving Products by Salaried Individuals UnderDifferent Income Slabs.” Written
and submitted by me to the Savitribai Phule Pune University, in partial fulfilment of the.
requirement for the award of degree of Masters of Business Administration under the guidance
of Prof. Sonali Bagade is my original work and the conclusions drawn therein are based on the
material collected by myself
Place: Signature of the candidate
Date: (YasheshBhansali)
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ACKNOWLEDGEMENT
I express my heartfelt gratitude and regards to my respected guide Prof. Sonali Bagde of Dr.
D.Y.Patil Institute of Management & Research, Pimpri for her support and guidance all
throughout my study. I thank all the faculty members for giving their feedback during
presentation and suggesting improvements in the project. My special thanks to honorable
Director, Dr. Rakesh Dholakia who has always motivated the students.
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Executive Summary
Taxes are one of the essential instruments for the survival of the country. Taxes collected by
the Government helps in running the development projects in the country, including defense and
healthcare. Any person having income above the prescribed basic exemption limit is liable to file
an Income tax return for the fiscal year, regardless of the tax liability.
While choosing the right tax saving plans it is important to consider the factors like safety,
returns and liquidity. Also it is important to keep a proper understanding of how the returns will
be taxed.
Individuals from different income groups have different investment preferences depending upon
various factors. In this report all the major tax saving investments are studied thoroughly from all
aspects along with their features, advantages and disadvantages in order to know the right
choices of tax saving products for the right income group. The study also help in understanding
the popularity and awareness of investment products among salaried individuals along with the
products that take maximum investment.
The investments were known from the various documents provided by the clients and the same
have been studied along with few expenses of which provide benefits in tax saving and
represented through various graphs and charts.
A sample size of 5 clients from each income group was considered for this study. Clients were
asked about the reasons behind their preference of a particular product and what opinion do they
hold regarding various other tax saving products.
Working with H&R Block India has helped in studying various tax saving investments
thoroughly along with the perception of salaried individuals towards tax saving products and the
extent or the portion of their income invested by them in these tax saving schemes.
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Index
SR.NO TOPIC PAGE NO.
1 INTRODUCTION 6-7
2 OBJECTIVES
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3 COMPANY PROFILE 9-12
4 THEORETICAL REVIEW 13-26
5 RESEARCH METHODOLOGY 27-30
6 DATA INTERPRETION 31-450
7 FINDINGS 51
8 SUGGESTION 52
9 CONCLUSION 53
10 BIBLIOGRAPHY 54
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Introduction
Tax saving investment plans are instrumental in effectively achieving your financial goals.
Investment schemes available in the market provide tax exemptions and tax deductions.
Salaried individuals have different investment requirement than self-employed or other

professionals. They have fixed monthly cash inflow to meet their expenses and save for various
life goals.
How to save tax? It is the most confusing question in the minds of every taxpayer. The tax
saving schemes provide a platform to the taxpayers through which they can easily save tax. The
investments in the income tax deductions are a way to save tax legally. The tax saving schemes
keep these deductions in mind and bring you the best way for saving taxes.
One must realize that tax saving instruments do much more than only saving taxes. Smart
planning with right tax saving instruments adds value to a portfolio. Tax saving investments
are integral part of one’s life. Taking into account the importance of these investments, people
frequently wish to invest. However, they are not keen enough to invest due to low returns and
different risks associated with various investments.
The tax saving schemes provide a platform to the taxpayers through which they can easily save
tax. The investments in the income tax deductions are a way to save tax legally. The tax saving
schemes keep these deductions in mind and bring you the best way for saving taxes.
As an investor, one should look for investment options that not only helps you save tax but also
generate tax-free income.
While choosing the right tax saver, among several other factors such as safety, liquidity and
returns, make sure you understand how the returns would be taxed. If the income earned is
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taxable, the scope to make money over the long run gets constrained as taxes will eat into your
returns.
In tax-saving financial products like the National Savings Certificate (NSC), Senior Citizens'
Savings Scheme (SCSS), 5-year time deposits with banks and post offices, the interest amount
gets added to your income and therefore is liable to be entirely taxed.
So, even though they help you save tax for the current year, the interest income becomes a tax
liability each year till the end of the tenure.
The post-tax return in a taxable instrument comes down after factoring in tax. For someone who
pays 30 percent tax, the post-tax return on a 5-year bank fixed deposit of 7 per cent is 4.9 per
cent per annum, excluding the surcharge! They can still be tax-exempt income if even after
adding the interest income, the individual's total income remains within the exemption limit as
provided by income tax rules. Illustratively, a taxpayer between ages 60-80 earns only interest
income from such taxable investments of about Rs 3 lakh a year. Since the income for such
individuals is exempted till Rs 3 lakh, even the interest earned from investment in taxable
products does not translate into tax liability for them.
But, for most others especially those earning a salary choosing tax savers that come with E-E-E
status helps. The investment in these get EEE benefit i.e. exempt- exempt- exempt status on the
income earned. The principal invested qualifies for deduction under Section 80C of the Income
Tax Act, 1961 and the income in all of them is tax exempt under Section 10.
There are different tax slabs in India. And based on the slab rate, the investment amount and
preferences also change. This report will help to bring out the above by studying investments
made by individuals under each income slab.
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Objectives
 To study the tax saving investments made by salaried individuals.
 To understand the preference for investment in various tax saving products by salaried
individuals under different income slabs.
 To understand the perception of salaried individuals and the extent of amount invested by
them in tax saving products.
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Company Profile
H&R Block (India) Pvt. Ltd
H&R Block, is the world's largest Tax Service Provider Company with over 800 Million returns
filed worldwide annually. We came to India in 2012 with an aim to provide easy tax filing
solutions to millions of individuals across the country. H&R Block provides services of
Individual Income Tax Filing, U.S. Expat Tax Filing, Business Tax preparation and GST
managed services.
Individual tax Preparation services are offered through two channels – Income Tax e-Filing by
Experts, and Self e-Filing of Income Tax Returns. Income tax Filing by Experts is a service
where a dedicated tax expert is assigned to you, to help you understand your tax modalities,
prepare returns for you and file your ITR online. If you prefer doing your taxes yourself, H&R
Block provides a highly intuitive online tool for e-Filing income tax returns which automatically
extracts all data from your Form 16, to help you file your taxes online yourself in 3 easy steps.
Our customers choose us over other service providers, as we offer a blend of tax filing methods
suited to the needs of our clients as well as dedicated year-round support. With more than 500
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corporate partnerships and over 6 Lakh clients, we are the ‘Largest Tax Services provider for
Individuals and Businesses’ in India with a strong focus on client satisfaction
H&R Block forayed into India in January of 2012 and today we are the Largest Consumer Tax
Filing Company in India. We have already tied up with 500+ corporates and e-Filed 6+ lakh
returns, with 8.9/10 customer satisfaction score. H&R Block India strives to blend tax expertise
with a strong focus on continually improving the client experience to provide all its clients with
an unparalleled value proposition.
And, we believe it is our people, highly trained Tax Experts, who have enabled H&R Block to
become the world’s largest individual tax services provider! Each H&R Block Tax Expert
provides personal advisory services to each client with the goal being to give the most accurate
advice and to prepare and e-file individual tax returns with complete accuracy. Our Tax Experts
work hard to ensure that each client pays the lowest income tax liability each year.
The Company was founded by Henry and Richard Bloch in 1955 in Kansas City, U.S.A. It is the
largest tax filer in the world with over 2.5 Crore clients served.
Vision
Similar to the past 60 years in U.S., H&R Block India is looking forward to the next 60 years in
India.
Mission
“We look into your life through tax and find ways to help”
Promises
 Satisfaction Guarantee – Pay only when satisfied!
 Tax Vault – We keep your documents safe.
 100% Accuracy Guaranteed – If we make an error, we fix it.
 Year - Around Access – We are open all year to assess you!
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H&R Block operations in various countries
United States of America

 Founded in 1955
 Served 24.2 million clients
 12000 retail offices
Canada
 Founded in 1964
 Served over 2.4 million clients
 1200 retail offices
Australia
 Founded in 1971
 Served over 6,75,000 clients
 400 retail offices.
Brazil
 Founded in 2012
 Served over lakhs clients
 clients 6 retail offices
Various service channels of H&R Block India Pvt. Ltd.
 OA (Online Assisted tax filing service) – This is the most important channel in India as
this channel generates most of the revenue for the company. In this channel, the client is
served and gets assistance online without face to face interaction. For this channel
company has developed its own software and website. This channel is further divided
into three segments:
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 OMC (Open Market Client) – This is the paid service and the major source of revenues.
 CORP (Corporate Clients) – The company has done tie ups with many other companies.
For the employees of the company the return filing service is free and they are charged
only if there is Capital gain or foreign income according to their complexity.
 NRI (Non-Resident Indians) – It is the paid service and serves many NRI’s.
 Brand office– It is also called as retail office. In this channel, client is served in the retail
offices located in six cities in India. Most of the clients served in this channel are NRIs,
complex cases or small or medium businesses.
 DIY (Do it Yourself) – In this channel the client can file his return by his own without
any assistance. This service is also free of cost. The company’s main focus is OA
channel as it generates more revenues in India unlike USA. In USA retail offices is the
most focused channel. H&R Block India Pvt. Ltd. started with a team of 8 tax experts in
2012 and filed around 3000 return in its first year reached to 30 tax experts or Associates
and in 2014 this number went to 100. in 2016, more than 300 and this year in 2017 more
than 400 Associates are serving their clients through OA channel.of operation. Last year
i.e. in the year 2015 it had served 46000 clients and this year they have a target of serving
250000 clients through 300 Associates in India. In 2013 the number
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Theoretical Review
Tax-saving or tax-planning is an important part of financial planning. If wisely done, it can serve
a dual objective – help individuals meet their financial goals and save tax in the process.
Investments under sec 80C
Most of us are already well aware of the deduction available under section 80C of the Income-
tax Act, 1961. The maximum amount of deduction that can be claimed under section 80C is Rs
1.5 lakh for the current financial year i.e. FY2018-19. The section offers various investment
options to the taxpayer which not only generate returns for him but can also be claimed as
deduction while calculating total taxable income.
Majority of people invest in life insurance policies, Public Provident Fund (PPF), equity-linked
savings schemes (ELSS) etc. to avail this deduction, but there are several other options, too,
which are worth considering. Deduction under section 80C is not only available for investments
but also for specified expenditures made by the taxpayer. However, in order to claim the
deduction for a particular financial year you need to invest/spend the deductible amount in that
financial year itself.
Here's a list of different investments and expenditures which can be claimed as deduction by the
taxpayer under section 80C for the current financial year:
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1) ELSS (tax saving mutual fund scheme)
Equity-linked savings schemes (ELSS) are diversified equity mutual funds with two
differentiating features - one, investment amount in them qualifies for tax benefit under Section
80C of the Income Tax Act, 1961, up to a limit of Rs 1.5 lakh a year and secondly, the amount
invested has a lock-in period of 3 years. Every mutual fund (MF) house offers them and
generally uses the word tax-saving in its name to distinguish them from their other mutual fund
schemes. The returns in ELSS are not fixed and neither assured but is dependent on the
performance of equity markets. One may opt for dividend or growth option in them. While the
former suits someone looking for a regular income, although not assured, the latter suits someone
looking to save for a long-term need. However, dividend in an equity MF scheme (including
ELSS) should not be construed as similar to the dividend received from an equity share. In the
latter, the dividend is declared out of profits generated by a company while in a MF, it is out of
the NAV. For a MF unit holder, receiving the dividend is merely equal to the redemption of
units.
Further, the dividends in an equity scheme are now ( April 1, 2018 onwards) subject to dividend
distribution tax of 10 percent. Hence, for someone investing in ELSS, choosing the growth
option over the dividend option will yield tax-effective returns. To mitigate risks, one may
diversify across more than one ELSS scheme (based on market capitalization and industry
exposure) after considering their long-term consistent performance. After the lock-in ends, one
may continue with the ELSS investments similar to any open-ended MF scheme. However,
review its performance against its benchmark before doing so. Investing in ELSS not only helps
you save for a long term goal but also helps you save tax and generate tax-exempt income.
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Mutual fund has become the top choice for the investors when it comes to fulfill their financial
goals. It’s widely available, easy to invest in and can be picked as per one’s requirement. It’s one
of the highly liquid investment options available today.
It’s a category of mutual fund which helps in saving taxes. ELSS offers you dual advantage of
capital appreciation as well as tax saving under section 80C of Income Tax Act. ELSS fund
comes under equity category (open ended) which means more than 65% of the money is invested
in equity. One can save taxes upto Rs. 46,800/-
There are a plethora of savings schemes to help you build your wealth, such
as FD, PPF and NSC to name a few. But the returns from these schemes are taxed. This is where
ELSS stands out with its dual-benefit – its returns are generally higher & partially
taxable (Returns are not taxable until 31 March 2018. After 31 March 2018, returns will be
taxable at a concessional rate of 10% if gains are over and above Rs. 1 lakh. This coupled with a
mere lock-in period of 3 years is all the more reason for you to invest in ELSS now.
Lowest lock in period: There are other tax saving products available in the market like PPF,
NPS or FDs and so on, however all these products have a lock in period of more than 5 years.
ELSS is one such product which gives you tax benefit with just a minimum lock in of 3 years.
Tax Saving: ELSS is a kind of mutual fund which provides deduction of upto 1.5lakhs from
total income under section 80C
Dividend and growth: one can choose to invest in either dividend or growth option depending
upon the requirement of money. In growth option money is re invested and keep on growing till
the time you redeem it, where as dividend is being paid out in dividend payout option. Dividend
paid by ELSS funds is also taxable@ 11.65%.
Tax Treatment: Interest earned is partially taxable
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2) Investments in Tax Saving FDs:
Fixed deposit is a type of deposit where an investment is made for a specific time period. Tax-
saving fixed deposit is one where investment amount can get deduction under Section 80C of the
Indian Income Tax Act. These deposits can be individual as well as joint. The tenure of these
deposits is generally five years. A maximum deduction of Rs 1.5 lakh can be claimed by
someone who invested in a tax saving fixed deposit FDs can be termed as financial tools that
offer higher rate of interest than saving accounts. They are considered to be one of the most
secure investment and tax saving options available. Almost all banks offer fixed deposits, so
before investing, it is important to weigh the pros and cons.
Eligibility : Can be opened by Resident Indian individuals.
Liquidity: Fixed Deposits have lock-in period of 5 years.
Rate of Interest : FD interest rate across different banks ranges from 5.5% to 7.75%
Investment Limit: Minimum investment limit is Rs 1000.
Tax Treatment : Interest earned in taxable.
Advantages of tax saving FDs:
Tax exemptions as listed out in Section 80C of the Income Tax (IT) Act, 1961.
Availability - All public and private sector banks offer fixed deposits in India. Now, the same
can be done via internet banking.
Assured returns: The interest offered by FD is greater than savings account. Longer the term of
FD, greater the returns. All banks have varying interest rates.
No limit on opening FDs: Any number of FDs can be opened at a particular bank or in different
banks. The exemption limit of interest on FDs is 1.5 lakh; until the amount reaches there it is free
from any taxes.
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Premature withdrawal is allowed after completing 5-year lock-in period.
Most banks offer 0.50% hike in interest rates to senior citizens.
Most Tax Saving FD schemes come with an option of joint account
Best Tax Saving FD In India 2019:
Bank Interest Rates (Regular Public)
State Bank of India 6.25%
ICICI Bank 7.00%
HDFC Bank 6.90%
PNB Bank 6.50%
IDFC Bank 7.75%
Deutsche Bank 7.75%
Axis Bank 6.75%
DCB Bank 7.25%
Bank of Baroda 6.25%
Lakshmi Vilas Bank 7.25%
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3) Investments in PPF (Public Provident Fund)
The PPF account or Public Provident Fund scheme is one of the most popular long-term saving-
cum-investment products, mainly due to its combination of safety, returns and tax savings.
The PPF was first offered to the public in the year 1968 by the Finance Ministry’s National
Savings Institute. Since then it has emerged as a powerful tool to create long-term wealth for
investors.
For decades, Public Provident Fund (PPF) Scheme, 1968 has been a favourite savings avenue for
several investors and is still standing tall. After all, the principal and the interest earned have a
sovereign guarantee and the returns are tax-free. PPF currently (subject to change every three
months) offers 8 percent per annum. For someone paying 31.2 percent tax (highest income slab),
it translates to nearly 11.62 percent taxable return. Now, how many taxable investments
including bank FD's are providing such high pre-tax return! One can open a PPF account in one's
own name or on behalf of a minor of whom he is the guardian. While the minimum annual
amount required to keep the account active is Rs 500, the maximum amount that can be
deposited in a financial year is Rs 1.5 lakh. This is the combined limit of self and minor account.
PPF is a 15-year scheme, which can be extended indefinitely in a block of 5 years. It can be
opened in a designated post office or a bank branch. It can also be opened online with few banks.
One is allowed to transfer a PPF account from a post office to a bank or vice versa. A person of
any age can open a PPF account. Even those with an EPF account can open a PPF account.
Investors use the PPF as a tool to build a corpus for their retirement by putting aside sums of
money regularly, over long periods of time (PPF has a 15-year maturity, and the facility to
extend the tenure). With its attractive interest rates and tax benefits, the PPF is a big favorite with
a small saver.
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Eligibility : Can be opened by Resident Indian individuals, salaried and non-salaried individuals.
A HUF cannot open a PPF account.
Liquidity: PPF account have lock-in period of 15 years, but can be further extended by 5 years.
Partial withdrawals are allowed after 7 years.
Rate of Interest : Current interest rate is 8.0% p.a.
Investment Limit: Minimum and maximum investment limit is Rs 500 and Rs 1.5 lakh
respectively.
Tax Treatment : Interest earned is tax-free.
Features of the PPF accounts
How much can you invest in the PPF? You can invest a minimum of Rs. 500 and a maximum of
Rs. 1,50,000 in a financial year.
What is a PPF account’s tenure? A PPF has a minimum tenure of 15 years. You can extend it in
blocks of 5 years if you wish.
Who is eligible for a PPF account? Any Indian citizen can open a PPF account.
You can take a loan on your PPF account between the 3rd and 5th year and make partial
withdrawals after the 7th year for emergencies only.
You can open a PPF account with just Rs. 100 with any recognized You can make deposits every
month or in a lump sum through cash, cheque, DD or online transfer.
The PPF accounts cannot be held jointly, though you can make a nomination.
You must compulsorily make a minimum deposit of Rs. 500 every year.
The government of India’s guarantee and unmatched tax benefits make a PPF account one of the
safest, attractive and popular long-term investments available.
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4) Investments in EPF (Employee Provident Fund)
EPF is a retirement benefit scheme that is available to all salaried employees. This amounts to
12% of basic salary + DA, that is deducted by an employer and deposited in the EPF or other
recognised provident funds
Employees' Provident Fund (EPF) is another avenue that helps a salaried individual not only
helps save tax through involuntary savings but also accumulate tax-free corpus. An employee
contributes 12 percent of one's basic salary each month mandatorily towards his EPF account.
An equal share is contributed by the employer but only a portion (3.67 percent) goes into EPF.
The employee's contributions qualify for tax benefit under Section 80C of the Income Tax Act,
1961, up to a limit of Rs 1.5 lakh a year but not the employer's share. Both, employee-employer
share qualifies for interest as declared by the government each year which is tax-free in nature.
One may, however, increase one's own contribution up to 100 percent of basic and DA, to his
VPF account and in doing so it becomes voluntary provident fund (VPF). The VPF is a part of
the EPF and all the rules remain the same. The interest earned on the EPF/VPF account is tax-
exempt so long as the employee continues in employment for five continuous years or more.
Although one may opt-out from VPF by intimating one's employer, the money contributed
towards VPF, which represents additional savings towards retirement, get locked-in for a longer
tenure, and hence use the VPF route judiciously.
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5) Investments in NPS (National Pension System)
The NPS is a pension scheme that has been started by the Indian Government to allow the
unorganized sector and working professionals to have a pension after retirement. Investments of
up to Rs 1.5 lakh can be used to avail tax deductions under Section 80C
The National Pension System (NPS) is a voluntary defined contribution pension system in India.
National Pension System, like PPF and EPF is an EEE (Exempt-Exempt-Exempt) instrument in
India where entire corpus escapes tax at maturity and entire pension withdrawal amount is tax-
free.
Contributions to NPS receive tax exemptions under Section 80C, Section 80CCC and Section
80CCD(1) of Income Tax Act. Starting from 2016, an additional tax benefit of Rs 50,000 under
Section 80CCD(1b) is provided under NPS, which is over the Rs 1.5 lakh exemption of Section
80C. Private Fund managers are important parts of NPS. NPS is considered one of the best tax
saving instruments, after 40% of the corpus was made tax-free at the time of maturity and it is
ranked just below Equity-linked savings scheme (ELSS).
Premature withdrawal in NPS before age of 60 years required parking 80% of the sum in an
annuity. One can withdraw 20 percent of the corpus before 60 years but he/she must buy annuity
with 80 percent of the corpus. In 2016, the NPS allowed withdrawal of up to 25% of
contributions for specified reasons, if the scheme is at least 3 years old with certain conditions.
One can withdraw the complete amount if the pension collected is less than INR 2,00,000.
Up to Rs. 150,000 under Section 80CCD(1). The benefit is additionally capped at 10% of basic
salary. The benefit under Section 80C, Section 80CCC and Section 80CCD(1) is capped at Rs
150,000. Contribution Up to Rs 50,000 under Section 80CCD(1B). This is over and above tax
benefit under Section 80CCD(1b).
Employer co-contribution up to 10% of basic and DA without any upper cap in terms of amount
is tax free income in hands of employees under Section 80CCD(2).
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6) Investments in ULIP (Unit linked Insurance Plans)
ULIPs are a mix of insurance and investment. A part of the invested amount in ULIPs is used to
provide insurance and the rest of the amount is invested in the stock markets. Investments of up
to Rs 1.5 lakh in ULIPs are eligible for tax breaks under Section 80C
Unit linked insurance plan (Ulip) is a hybrid product, a combo of protection and saving. It not
only provides life insurance but also helps channel one's savings into various market-linked
assets for meeting long-term goals. In most Ulips, there are 5 to 9 fund options with varying
asset allocation between equity and debt. A Ulip can have a duration of 15 or 20 years or more
but the lock-in period is 5 years. The fund value on exiting the policy (allowed after 5 years) or
on maturity is tax-free. Any switching between the fund's options irrespective of the holding
period is exempt from tax. Whom does Ulips suit: Ulips may not be suitable for all investors.
Those investors who are comfortable in identifying and managing the ELSS schemes and
simultaneously hold a pure term insurance plan, need not buy Ulips. Also, investors looking at
investing in Ulips should make sure that the goal for which the Ulip savings is to be used is at
least ten years away. For someone to exit Ulip after 5-7 years could be financially damaging.
7) Investments in Sukanya Samriddhi Yojana
Sukanya Samriddhi Yojana/Scheme is one of the most popular schemes by the Government of
India. The scheme is aimed at the betterment of girl child in the country
Sukanya Samriddhi Yojana (SSY) is a small deposit scheme for the girl child launched as a part
of the 'BetiBachaoBetiPadhao' campaign. It is currently fetching an interest rate of 8.1 percent
and provides income-tax benefit. A Sukanya Samriddhi Account can be opened any time after
the birth of a girl till she turns 10, with a minimum deposit of Rs 1,000. A maximum of Rs 1.5
lakh can be deposited during the ongoing financial year. The account will remain operative for
21 years from the date of its opening or until the marriage of the girl after she turns 18.
Currently, SSY offers the highest tax-free return (8.5 percent per annum) with a sovereign
guarantee and comes with the exempt-exempt-exempt (EEE) status. The annual deposit
(contributions) qualifies for Section 80C benefit and the maturity benefits are non-taxable.
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8) National Savings Certificate
The National Savings Certificate is a fixed income investment scheme that you can open with
any post office. A Government of India initiative, it is a savings bond that encourages
subscribers – mainly small to mid-income investors – to invest while saving on income tax. A
fixed income instrument like Public Provident Fund and Post Office FDs, this scheme too is a
secure and low-risk product. You can buy it from the nearest post office in your name, for a
minor or with another adult as a joint account. They come with two fixed maturity periods – 5
years and 10 years. There is no maximum limit on the purchase of NSCs, but only investments of
up to Rs 1.5 lakh can earn you a tax break under Section 80C of the Income Tax Act. The
certificates earn a fixed interest, which is currently at a rate of 8% per annum.
Investments of up to Rs 1.5 lakh in the National Savings Certificate can earn the subscriber a tax
rebate under Section 80C. Furthermore, the interest earned on the certificates are also added back
to the initial investment and qualify for a tax break as well. For instance, if you purchase
certificates worth Rs. 1000, you are eligible for a tax respite on that initial investment amount in
the first year. But in the second year, you can claim a tax deduction on the NSC investment(s)
that year as well as the interest earned in the first year. This is because the interest is added to the
original investment and compounded annually.
Who Should Invest in NSC?
Anyone looking for a safe investment avenue to save taxes while earning a steady income can
opt for this scheme. The NSC offers guaranteed interest and complete capital protection.
However, like most fixed income schemes, they cannot deliver inflation-beating returns like tax-
saving mutual funds and National Pension System. The government has made NSC easily
accessible for prospective investors by making it available in post offices. The government has
made NSC easily accessible for prospective investors by making it available in post offices.
Basically, the Government has promoted National Savings Certificate as a savings scheme for
individuals. Hence, Hindu Undivided Families (HUFs) and trusts cannot invest in it.
Furthermore, even non-resident Indians (NRI) cannot purchase NSC certificates. The scheme is
open only for Indian individual citizens.
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9) Investment in LIC
Purchasing life insurance is a must, especially if your spouse and children are dependent on your
income to survive. Even if your spouse is earning, it would be a good idea to cover your life –
though this cannot make up for the emotional loss, but at least, your family members will be
financially secure. There are many life insurance companies in India, offering hundreds of plans
for various needs and age groups. While choosing a plan, you also need to consider the tax
implications of taking a life cover too.
If you have paid an insurance premium to insure your own life or the life of your spouse or child,
such premium payments are eligible for deduction under section 80C of the Income Tax Act.
Irrespective of your child being dependent or independent, minor or major, married or
unmarried, the deduction under section 80C shall be allowed. An individual and a HUF, both,
can claim this deduction under Section 80C.
Many taxpayers have a doubt about whether this deduction is available only in respect of life
insurance cover taken with LIC. This is not true. Premium paid towards a life cover taken with
any insurer that is approved by the Insurance Regulatory and Development Authority of India
(IRDAI), is eligible for a Section 80C deduction.
However, to claim deduction under section 80C the premium paid should not exceed 10% of the
sum assured where the policy has been issued after 1st April 2012. For policies issued prior to 1
April 2012, in order to claim this deduction, the premium paid should not exceed 20% of the sum
assured. Further, here it is important to note that a policy issued after 1 April 2013, covering the
life of an individual with a disability referred to under Section 80U or a disease referred to under
Section 80DDB, the requirement to claim the deduction under Section 80C is that the premium
should not exceed 15% of the sum assured.
“Sum assured” simply means the minimum amount assured under the policy to the survivor. This
amount does not include premium which has been agreed to be returned or any payment of bonus
on the policy.
24
Exemption under section 10(10D) on Maturity amount received
When the premium paid on the policy does not exceed 10% of the sum assured for policies
issued after 1 April 2012 and 20% of sum assured for policies issued before 1 April 2012– any
amount received on maturity of a life insurance policy or amount received as bonus is fully
exempt from Income Tax under Section 10(10D). Also covered here are policies taken after 1
April 2013, on the life of a person with a disability or a disease specified under Sections 80U and
80DDB respectively, where the amount received on maturity is tax-free provided the premium
paid does not exceed 15% of the sum assured.
TDS on life insurance policy
Starting October 2014, if the amount received from a life insurance policy is more than Rs
1,00,000, on policies not covered under an exemption under Section 10(10D), then TDS @ 1%
shall be deducted by the insurer before making this payment. TDS will also be deducted on
bonus payments. If the amount received is less than Rs 1,00,000, no TDS shall be deducted but
the amount received shall be fully taxable for you. You can claim credit for the TDS deducted in
your Income Tax Return.
The union budget 2019 has proposed to amend the TDS on insurance policy proceeds to 5% on
the amount of income comprised in the proceeds paid or payable upon maturity on or after 1st
September 2019.
Life insurance premium payments can be claimed as deduction under Section 80C subject to a
maximum limit of Rs.1,50,000. The only condition is the premium must be less than 10% of the
sum assured.
Section 80CCC provides a deduction to an individual for any amount paid or deposited in any
annuity plan of LIC or any other insurer. The plan must be for receiving a pension from a fund
referred to in Section 10(23AAB). Pension received from the annuity or amount received upon
surrender of the annuity, including interest or bonus accrued on the annuity, is taxable in the year
of receipt.
25
Tax saving options other than section 80C
1) Section 80D: Payment of medical insurance premium

A mediclaim policy is a must nowadays because if you or your family fall sick or meet with an
accident, your medical bills could wipe out your savings. The amount paid as medical insurance
premium (mediclaim) is eligible for deduction under this section. You can take the policy in your
or spouse's name, dependent parents or/and children. If you are a Hindu Undivided Family
(HUF), then the policy can be taken in the name of any family member.
To claim deduction, you have to first pay the premium by any mode other than cash. Also, the
insurer should be approved by either the central government or the Insurance Regulatory and
Development Authority of India (IRDAI).
The limits for claiming deduction under this section have increased substantially for FY 18-19.
You can now avail a deduction of up to Rs 1 lakh which was Rs 60000 before.
An individual can avail a maximum deduction of Rs 25,000 for the premium paid for oneself,
spouse or dependent children. One can get an additional deduction of Rs 25000 for the premium
paid for one's parents. In case of medical insurance premium paid for policies for senior citizens
a maximum deduction of Rs 50,000 can be claimed from FY2018-19 onwards. Therefore, if a
person takes policies for self, spouse and senior citizen parents then he/she can claim a total
deduction of Rs 25,000 plus Rs 50,000 i.e. Rs 75,000.
26
Research Methodology
 Meaning Of Research
Research may be very broadly defined as systematic gathering of data and information and its
analysis for advancement of knowledge in any subject. Research attempts to find answer
intellectual and practical questions through application of systematic methods. Webster’s
Collegiate Dictionary defines research as "studious inquiry or examination; esp: investigation or
experimentation aimed at the discovery and interpretation of facts, revision of accepted theories
or laws in the light of new facts, or practical application of such new or revised theories or laws".
Some people consider research as a movement, a movement from the known to the unknown.
It is actually a voyage of discovery. We all possess the vital instinct of inquisitiveness for, when
the unknown confronts us, we wonder and our inquisitiveness makes us probe and attain full and
fuller understanding of the unknown. This inquisitiveness is the mother of all knowledge and the
method, which man employs for obtaining the knowledge of whatever the unknown, can be
termed as research.
 Research Design
Research design is defined as a framework of methods and techniques chosen by a researcher to

combine various components of research in a reasonably logical manner so that the research
problem is efficiently handled. It provides insights about “how” to conduct research using a
particular methodology. Every researcher has a list of research questions which need to be
assessed – this can be done with research design. The design of a research topic is used to
explain the type of research (experimental, survey, correlational, semi-experimental, review) and
also its sub-type (experimental design, research problem, descriptive case-study). There are three
main sections of research design: Data collection, measurement, and analysis.
27
 Types of Research Design
A researcher must have a clear understanding of the various types of research design to select
which type of research design to implement for a study. Research design can be broadly
classified into quantitative and qualitative research design.
Qualitative Research Design: Qualitative research is implemented in cases where a relationship

between collected data and observation is established on the basis of mathematical calculations.
Theories related to a naturally existing phenomenon can be proved or disproved using
mathematical calculations. Researchers rely on qualitative research design where they are
expected to conclude “why” a particular theory exists along with “what” respondents have to say
about it.
Quantitative Research Design: Quantitative research is implemented in cases where it is

important for a researcher to have statistical conclusions to collect actionable insights. Numbers
provide a better perspective to make important business decisions. Quantitative research design
is important for the growth of any organization because any conclusion drawn on the basis of
numbers and analysis will only prove to be effective for the business.
Further, research design can be divided into five types –
1. Descriptive Research Design: In a descriptive research design, a researcher is solely

interested in describing the situation or case under his/her research study. It is a theory-based
research design which is created by gather, analyze and presents collected data. By implementing
an in-depth research design such as this, a researcher can provide insights into the why and how
of research.
2. Experimental Research Design: Experimental research design is used to establish a

relationship between the cause and effect of a situation. It is a causal research design where the
effect caused by the independent variable on the dependent variable is observed
3. Correlational Research Design: Correlational research is a non-experimental research design

technique which helps researchers to establish a relationship between two closely connected
variables.
28
4. Diagnostic Research Design: In the diagnostic research design, a researcher is inclined
towards evaluating the root cause of a specific topic. Elements that contribute towards a
troublesome situation are evaluated in this research design method.
5. Explanatory Research Design: In exploratory research design, the researcher’s ideas and
thoughts are key as it is primarily dependent on their personal inclination about a particular topic.
Explanation about unexplored aspects of a subject is provided along with details about what,
how and why related to the research questions.
 RESEARCH METHODOLOGY OF PROJECT

Research is done to analyze the Investment towards tax saving products by salaried individuals
with reference to clients of H&R Block India. So descriptive and analytical study would be
appropriate for the study.
Descriptive research is used to describe characteristics of a population or phenomenon being

studied. It does not answer questions about how/when/why the characteristics occurred. Rather it
addresses the "what" question (what are the characteristics of the population or situation being
studied?)The characteristics used to describe the situation or population are usually some kind of
categorical scheme also known as descriptive categories.
Analytical research is a specific type of research that involves critical thinking skills and the
evaluation of facts and information relative to the research being conducted. Research of any
type is a method to discover information. Within analytical research articles, data and other
important facts that pertain to a project is compiled; after the information is collected and
evaluated, the sources are used to prove a hypothesis or support an idea. Using critical thinking
skills (a method of thinking that involves identifying a claim or assumption and deciding if it is
true or false) a person is able to effectively pull out small details to form greater assumptions
about the material.
5 cases from each income slabs have been taken as a sample for this research.
29
Data Collection:
Documents related to tax saving products, Form 16, Questionnaire, observation and interation
with the clients.
Primary Data:
Primary data has been collected through observation and interaction with the clients, documents
provided by clients such as Form 16, Form 26AS, and various other documents related to the
investments made.
Secondary Data:
Secondary data is collected through articles and websites.
30
Data Analysis and Interpretation
Clients of H&R Block from all the income slabs have been covered below.
Tax Slabs For AY 2019-2020 for Age group below 60 years.
Income Threshold Tax rate applicable

Up to ₹ 2,50,000 NIL
5% on income exceeding Rs. 2.5 lakh
₹ 2,50,001 to ₹ 5,00,000
(max. Rs. 12,500)
20% on income exceeding Rs. 5 lakh
₹ 5,00,001 to ₹ 10,00,000
(max. Rs. 1 lakh) + Rs. 12,500
30% on income exceeding Rs. 10 lakh +
Over ₹ 10,00,000
Rs. 1 lakh + Rs. 12,500
31
Income Slab:
0-5Lakhs
Client 1:
Name : Mr. X
Age : 28
Income : Rs 450000.
Invested amount :100000
Investments made :
Product Invested Amount
LIC 21000
PPF 35000
Provident Fund 39000
Preventive Health Checkup 5000
Client 2:
Name : Mr. Y
Age : 50
Income : 300000
Invested amount : 85000
Investment made :
LIC 20000
NPS 40000
32
Client 3:
Name :Mr.Z
Age : 38
Income : Rs 325000
Invested amount : Rs 60000
Investment made :
LIC 15000
NPS 25000
Client :4
Name :Mr.P
Age : 26
Income :Rs 500000
Investment made :
PPF 50000
ULIP 40000
NSC 22000
33
Client : 5
Name :Mr.Q
Age : 43
Income : Rs 420000
LIC 25000
PPF 35000
Interpretation :
The Pie Chart ahead shows the percentage of total amount invested in various tax saving product
by salaried individuals under the income of Rs 500000.
34
NPS, 13.40% LIC, 16.70%
NSC, 4.53%
Health Chekup,
1.03%
ULIP, 8.24%
PF, 31.34%
PPf, 24.74%
Product Popularity
6
0
Product PPF ELSS LIC Health Insurance NPS
Popularity Very High High Moderate Moderate Low
35
From the above cases, it is clear that clients with income upto 5 lakhs have all invested in
provident fund. One of the major reason for this is that the employer directly deducts the amount
from employee’s salary and invest it in the Employee Provident Fund Account before giving the
final salary to employee.
Keeping PF aside, LIC &Public provident fund (PPF) are the most popular tax saving product
which employees invest voluntarily. One of the important reason for this is that PPF is
considered one of the safest investment as individuals in this group like to take minimum or no
risks.
LIC is popular product in this income slab, There are various advantages of investing in LIC
Reasons for investing in Life Insurance
Life insurance provides an infusion of cash for dealing with the adverse financial consequences
of the insured’s death.
Life insurance enjoys favorable tax treatment unlike any other financial instrument.
Death benefits are generally income-tax-free to the beneficiary.
Death benefits may be estate-tax free if the policy is owned properly.
Cash values grow tax deferred during the insured’s lifetime.
Cash value withdrawals are treated on a first-in-first-out (FIFO) basis, therefore cash value
withdrawals up to the total premiums paid are generally income-tax free.
Policy loans are income tax free.
A life insurance policy may be exchanged for another life insurance policy (or for an annuity)
without incurring current taxation.
Other tax saving product like NPS have moderate popularity and investors have seen it as an
option for safe investments with consideration for the retirement.
Reasons to invest in NPS
36
Tax Benefit Under NPS: Contribution up to Rs 50,000/- made towards your NPS account is
eligible for Tax Deduction U/S 80 CCD (1B), which is up and over the deduction of Rs
1,50,000/- available U/S 80C. Individuals exploring additional tax saving options may also look
to invest in Scheme. As announced recently, entire withdrawal amount 60% of the total NPS
corpus is exempted from tax at the time of retirement. Previously, only 40% of the withdrawal
amount was exempted. Thus the entire withdrawal corpus is exempted from tax. This implies
that post mandatory utilization of 40% of the fund to buy an annuity plan, no tax is required to be
paid on the rest of the lumpsum withdrawal.
NPS: Government Model
Diversification of Funds: Investment in NPS is diversified into 4 classes of funds, namely

Equity (E), Fixed Return Instruments (C), Government Bonds (G), Alternative Investment Funds
(A). Individuals have the option to chose the allocation of funds based on their preference and
appetite to take risk. However, allocation in equities is restricted to 75% of the contribution.
Thus, it ensures that Individuals benefit from the equity market. At the same time, allocation to
Government and Fixed Return instruments ensure that in case of equity market under performing
Subscribers don’t lose out heavily on their investment.
Low Cost Investment: This is one of the Low Cost retirement benefit scheme available to the
Subscribers and is one of the key selling points of the scheme. Fund Managers charge a nominal
fee of 0.01% to manage the fund which is beneficial for the investors. Subscribers are required to
contribute minimum of just Rs 1,000/- annually in the scheme.
Professional Management of Funds: The fund is managed by Pension Fund Managers (PFMs).
PFMs are professional fund managers who manage the pool of funds with the objective of
providing maximum returns on investment. Subscribers do not have to manage their investment
as PFMs undertake the same at a very nominal cost. The fund may be allocated in 4 different
asset classes based on the risk appetite of the Subscriber. Moreover, Subscribers have the option
to switch between the 8 PFMs available under NPS.
37
Income Slab :
5Lakhs – 10 Lakhs
This income group has a mixture of individuals who believe in ‘High Risk, High Return’ and
those who prefer to play it safe. The awareness about various tax saving products and to
diversify the investment in on a rise in this income slab. This group tries to take the maximum
advantage of 150000 limit of 80C.
Client :1
Name :Mr.A
Age : 39
Income : Rs 700000
Investment made :
Product Invested amount
PPF 60000
ELSS 45000
LIC 30000
VPF 15000
Client :2
Name : Mr.B
Age : 55
Income : Rs 950000
Investment made :
38
Product InvestedAmount
ELSS 65000
Tax Saving FD 50000
PPF 55000
NPS 25000
LIC 35000
Client :3
Name : Mr.C
Age : 28
Income : Rs 740000
Investment made :
PPF 70000
ELSS 50000
LIC 30000
Client :4
Name : Mr.D
Age : 44
Income : Rs 660000
Investment made :
39
PPF 40000
ULIP 35000
Health Insurance 25000
ELSS 30000
NPS 20000
Client :5
Name : Mr.E
Age : 50
Income : Rs 950000
Investment made :
ELSS 50000
PPF 60000
LIC 40000
Interpretation:
The Pie Chart below shows the percentage of total amount invested in various tax saving product
by salaried individuals under the income of Rs 500000-1000000
40
PERCENTAGE OF AMOUNT INVESTED IN VARIOUS TAX SAVING
PRODUCT
Tax Saving FD, 115000
VPF, 55000 ELSS, 255000
Health Insurance,
196000 LIC, 60000
ULIP, 55000 PPF, 185000
The figure clearly shows that PPF & ELSS are the two majorly invested products by this income
group. With PPF being the most popular among all.
Popularity
6
0
Product PPF ELSS LIC Health Insurance NPS
Popularity Very High High Moderate Moderate Low
As PPF is the most invested as well as popular product in this income group, there are various
reasons for it.
41
Reasons to Invest In PPF
Risk-free, guaranteed returns: The Public Provident Fund is backed by the Government of
India. So, one of the most significant PPF account benefits is that it is entirely risk-free. The
returns, too, are guaranteed by the government. What’s more is that the funds in your account
cannot be attached by even a court order to pay off debtors.
Multiple PPF tax benefits: The great thing about a PPF is its exempt-exempt-exempt (EEE) tax
status, one of the only investments in India to enjoy such an advantage. The amount you invest
up to Rs. 1,50,000 is deductible from your taxable income, the interest you earn is non-taxable
and the maturity amount you get after 15 years is also tax exempt. This makes it one of the most
tax efficient investments.
Small savings, good returns: The PPF allows you a lot of flexibility in the investment amount.
You can open an account with as little as Rs. 100. Every year, you can invest a minimum of Rs.
500 and a maximum of Rs. 1,50,000. You can make these investments in a maximum of 12
instalments or as a lump sum. Currently , the PPF offers an interest rate of Rs. 7.6%,
compounded annually.
42
Income Slab :
Above 10 Lakhs
Client :1
Name : Mr. J
Age : 42
Income : Rs 1600000
Investment made :
Product Amount invested
ELSS 70000
ULIP 30000
PPF 25000
Tax Saving FD 45000
Client : 2
Name : Mr. K
Age : 47
Income : Rs 2200000
Investment made :
Product Amount Invested
ELSS 50000
LIC 30000
VPF 25000
PPF 25000
Tax Saving FD 45000
43
Client : 3
Name : Mr. L
Age : 38
Income : Rs 3600000
Investment made :
ELSS 50000
LIC 30000
VPF 30000
PPF 55000
Client : 4
Name : Mr. M
Age : 53
Income : Rs 1200000
Investment made :
PPF 30000
ELSS 35000
Tax Saving FD 25000
44
Client : 5
Name : Mr. N
Age : 40
Income : Rs 4200000
Investment made :
PPF 50000
ELSS 50000
ULIP 25000
Interpretation:
The Pie Chart ahead shows the percentage of total amount invested in various tax saving product
by salaried individuals under the income above Rs 1000000.
45
PERCENTAGE OF AMOUNT INVESTED IN VARIOUS
TAX SAVING PRODUCT
Tax Saving FD, 115000,

12%
ELSS, 255000, 28%
VPF, 55000, 6%
Health Insurance,
196000, 21%
LIC, 60000, 7%
ULIP, 55000, 6%
PPF, 185000, 20%
ELSS LIC PPF ULIP Health Insurance VPF Tax Saving FD
The above pie chart shows that most of the amount is invested in ELSS followed closely by
Health Insurance and PPF. As this group is ready to bear the risks in expectation of high returns,
ELSS is also the most popular product in this income group.
46
Reasons to Invest in ELSS:
Just 3 years of lock in.
The portfolio in which the will be invested is transparently available to all the investors.
Once the invested money completes 3 years of lock in period, you can with draw 100% of it.
ELSS provides you flexibility to invest via SIP or lump sum mode.
The returns regenerated by ELSS funds are comparatively better than in competitor products.
Fund manager is the expert who manages your money, even if you are new to investment but
want to save tax, ELSS could be a good option.
There is no maximum limit for investment in ELSS even once you tax limit is exhausted , one
can still invest in ELSS only thing is taxes can be saved up to Rs. 46,800*/-.
One should also keep in mind the few drawbacks while investing in ELSS.
Drawbacks of ELSS Funds:
ELSS is equity linked investment; there is no way one can avoid exposure towards equity in so
it’s not suitable for conservative investors.
The money which you received after 3 years of lock in period will be taxable as per Long term
capital gain tax.
The returns are not guaranteed, any investment in mutual fund doesn’t guarantee returns.
NRI from Canada and US can’t invest in mutual funds.
47
Health Insurance Is another very popular investment wherein almost all the individuals in this
income slab have a health insurance plan.
Reasons to Invest in Health Insurance (80D)
The Various Waiting Periods
Health insurance plans have waiting periods that may range from 30 days to 4 years days during
which no claims can be made.If you buy your health insurance policy at a young age, you can be
sure that you can easily ride out the waiting period. Apart from this waiting period, there are
others regarding pre-existing diseases and ailments like cataract, knee replacements, etc. When
you are young, you generally don’t need coverage for such ailments, which allows you to
complete the waiting periods without any issues.
Comprehensive Plans at lower Premiums
When you are young, you can avail health insurance plans without any medical check-up, and
you are offered a wider range of policies. Premium rates depend on a number of factors, one of
which is the age of the policy holder. So, you can get a comprehensive and holistic coverage at
lower premiums. Many of the latest insurance plans offer wide coverage that covers vector borne
diseases, day care procedures, OPD expenses, maternity benefits, etc.Further, the coverage will
only increase as you get older, so the longer you are on your plan, the better coverage you can
get. And with the numerous plans available to you, you have the freedom to opt for a plan after
due consideration, to choose one that suits your needs and requirements the best.
Lifetime Renewability
Buying health insurance at an older agecomes with numerous caveats. You have to undergo
medical check-ups before you can avail the insurance, and a lot of policies also come with upper
age ceilings for entry into health insurance. But, when you buy a health insurance policy at a
48
young age, you can look for a policy that offers lifetime renewability, and ensure that you remain
covered for a long period of time and can avail extended coverage.
Tax Benefits for a Longer Period
According to the Income Tax Act of 1961, under section 80D, one may claim the premium paid
towards individual or family health insurance as a deduction from their total income.When you
buy insurance at a younger age, you can enjoy the tax benefits for a longer period of time.
Cumulative Bonuses
Almost all insurance companies offer a cumulative bonus for every claim-free year, called the
‘No Claims Bonus’. When you buy insurance at a young age, chances are that getting through a
year without claims might not be that hard, and as it is a cumulative bonus, you can accumulate a
significant increase in the total coverage amount, which will be very helpful in the later years
when you actually need a larger coverage.
Better Financial Planning
Buying a health insurance policy at a younger age lets you access better health coverage. It also
helps in planning your finances in a better manner. When your medical cover is adequate
according to your needs, you can focus on making other long term investments.
Apart from the above mentioned benefits, there are fewer chances of you suffering from health
complications. This means that the chances of your application to buy a health insurance policy
being rejected are next to negligibl
49
There are also various expenses under Sec.80C of which one can claim benefit.
1) Principal amount of Housing Loan
2) Tuition Fees of children.
Head To Head Comparison Of Tax Saving Products.
50
Findings
As the income increases, the willingness to take the risk also increases. And thus individuals in
High income group invest in products with considerably more risks.
LIC policies are one product in which people from all income groups invest.
Even though the maximum limit of deduction available under sec 80C is Rs 150000, as we move
higher in the income groups, the invested amount by these individuals is considerably more than
1.5 Lakhs.
ELSS is the product which promises highest returns but also contains the highest risk.
Most invested products under various income groups :
0-5 Lakh: LIC (closely followed by PPF)
5-10 Lakh: PPF ( closely followed by ELSS)
Above 10 Lakh : ELSS (Health insurance)
51
Suggestion
 Individuals with low income group are mostly not aware about Mutual Fund Investment,
They should actively learn and invest in schemes like ELSS.
 Many individuals are not taking full advantage of the capacity of total deduction
available under sec 80C i.e. 150000. They should try and exhaust the full limit of sec
80C.
 Individuals should diversify their portfolio of investment to minimize risks and maximize
returns.
52
Conclusion
Investments in various products help in saving tax. These investments vary according to age
group and income slabs. With proper planning these tax saving products can help a salaried
individual save a considerable amount of money.
Each tax saving product comes with various advantages and drawbacks. An investment suitable
for one might not be suitable for other, hence one must invest keeping in mind ones needs and
expectations.
There are large variety of tax saving products available in market which are being promoted by
government. Investing in them with proper planning will not only help individuals save tax but
also add a source of income.
53
Questionnaire
Name:
Age:
Company name :
Income:
Q1)Which of the following products have you invested in? And how would you rate each of
them on a scale of 1-5
PRODUCT INVESTE 1 2 3 4 5
D
PPF
VPF
NSC
ELSS
SUKANYA
SAMRIDDHI
SCHEME
Tax Saving FD
ULIP
NPS
LIC PREMIUM
SCSS ( SENIOR
CITIZEN
SAVINGS
SCHEME )
HEALTH
INSURANCE
PREMIUM
(80D)
54
Q2) How much percentage of your total income do you invest ?
 0 -10%
 10-20%
 20-30%
 More than 30 %
Q.3)Which of the following expenses are you taking benefit of for tax saving ?
 Children Tuition Fees
 Repayment Of Housing Loan
 Any other
Q4) What are the parameters you take into consideration while investing ?
 Return on investment
 Liquidity
 Maturity period
 Risk level
 Tax advantage
 Cost of investment
 Past track record
 Any other
55
Bibliography
Books :
ICAI Direct Taxation Module
Taxman : Direct Taxes Law & Practice
Web Sources:
https://economictimes.indiatimes.com/
https://cleartax.in/
https://www.hdfcsec.com/
https://www.icai.org/
https://www.hrblock.in/
56

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A PRPOJECT EPORT ON

“ANALYSIS OF INVESTMENT TOWARDS TAX SAVING PRODUCTS

Dr. D. Y. Patil Unitech Society’s

Place: Signature of the candidate

SR.NO TOPIC PAGE NO.

3 COMPANY PROFILE 9-12

4 THEORETICAL REVIEW 13-26

5 RESEARCH METHODOLOGY 27-30

6 DATA INTERPRETION 31-450

Salaried individuals have different investment requirement than self-employed or other

 To study the tax saving investments made by salaried individuals.

H&R Block (India) Pvt. Ltd

United States of America

Various service channels of H&R Block India Pvt. Ltd.

Investments under sec 80C

Tax Treatment: Interest earned is partially taxable

Eligibility : Can be opened by Resident Indian individuals.

Liquidity: Fixed Deposits have lock-in period of 5 years.

Investment Limit: Minimum investment limit is Rs 1000.

Tax Treatment : Interest earned in taxable.

Advantages of tax saving FDs:

Most banks offer 0.50% hike in interest rates to senior citizens.

Most Tax Saving FD schemes come with an option of joint account

Best Tax Saving FD In India 2019:

Bank Interest Rates (Regular Public)

State Bank of India 6.25%

ICICI Bank 7.00%

HDFC Bank 6.90%

PNB Bank 6.50%

IDFC Bank 7.75%

Deutsche Bank 7.75%

Axis Bank 6.75%

DCB Bank 7.25%

Bank of Baroda 6.25%

Lakshmi Vilas Bank 7.25%

Rate of Interest : Current interest rate is 8.0% p.a.

Tax Treatment : Interest earned is tax-free.

Features of the PPF accounts

7) Investments in Sukanya Samriddhi Yojana

Who Should Invest in NSC?

TDS on life insurance policy

1) Section 80D: Payment of medical insurance premium

Research design is defined as a framework of methods and techniques chosen by a researcher to

Qualitative Research Design: Qualitative research is implemented in cases where a relationship

Quantitative Research Design: Quantitative research is implemented in cases where it is

Further, research design can be divided into five types –

1. Descriptive Research Design: In a descriptive research design, a researcher is solely

2. Experimental Research Design: Experimental research design is used to establish a

3. Correlational Research Design: Correlational research is a non-experimental research design

 RESEARCH METHODOLOGY OF PROJECT

Descriptive research is used to describe characteristics of a population or phenomenon being

Secondary data is collected through articles and websites.

Tax Slabs For AY 2019-2020 for Age group below 60 years.

Income Threshold Tax rate applicable

Reasons for investing in Life Insurance

Death benefits are generally income-tax-free to the beneficiary.

Death benefits may be estate-tax free if the policy is owned properly.

Cash values grow tax deferred during the insured’s lifetime.

Policy loans are income tax free.

Reasons to invest in NPS

NPS: Government Model

Diversification of Funds: Investment in NPS is diversified into 4 classes of funds, namely

Tax Saving FD, 115000