Usage of Tax Saving Instruments Among Individual Assesses

Tax planning is one of the key aspects of financial planning from a tax perspective. Efficient tax planning enables every taxpayer to reduce the tax liability to the minimum. This is done by legitimately availing various tax exemptions, deductions under chapter VIA, rebates and allowances available under the Income Tax Act, 1961. The ever increasing functions of the government have naturally lead to increased expenditure, for instance, achieving the social and economic objectives laid down in the constitution, balancing regional economic growth, removing the concentration of economic power in few hands, reducing the inequality of income, and so on. The wealth of an individual is maximized by increasing the level of savings in various investment avenues. The key area of the research is to learn the appropriate popularly used tax saving instruments and also the factors influence the investment in those tax saving instruments. It is empirical research which will throw light upon the aspects of tax planning and ways to reduce the income tax liability.