P: ISSN No. 2394-0344 RNI No.  UPBIL/2016/67980 VOL.- VIII , ISSUE- IV July  (Part-1) - 2023
E: ISSN No. 2455-0817 Remarking An Analisation
A Study on Income Tax Planning Among Faculties of Government College in Rajasthan
Paper Id :  19053   Submission Date :  06/07/2023   Acceptance Date :  17/07/2023   Publication Date :  25/07/2023
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Hanuman Sahai Kumawat
Assistant Professor
Department Of ABST
S.P.C. Government College
,Ajmer, Rajasthan, India
Abstract

Income Tax planning comprises an efficient use of various provisions and loopholes of tax laws to reduce the tax liability. This is done by legitimately taking maximize advantage of all tax deductions, exemptions, allowances and rebates as per Income Tax Act, 1961. This study examined the investment pattern and the awareness on tax planning among teaching faculties of government colleges in Rajasthan. Structured questionnaire was used to gather the primary data and 250 teachers of government colleges working in different districts of Rajasthan were selected for the study by adopting stratified sampling technique. Secondary data was collected for a period of four financial years from 2019-20 to 2022-23. The objective of this paper is to study the Income-tax planning and tax savings strategies among Assistant Professors, Associate Professors, Professors of Government Colleges in Rajasthan. The study presented is both empirical and descriptive in nature. The techniques used in this study comprise trend analysis and ratio analysis.

General findings of the present study shows that standard deduction under section 16(ia), deduction of Interest on housing loan u/s 24B and deductions u/s 80C, 80CCC, 80CCD(1), 80CCD(1B), 80D, 80E, 80TTA are the most adopted. The findings expose that the respondents are moderately aware about the tax planning strategies. The paper concludes teaching faculties in government colleges in Rajasthan want to know their tax liability in the right measures of tax planning so that they can reducing the incidence of tax.
Keywords Academicians, Deductions, Investment Decisions, Tax Planning, Tax Savings.
Introduction

Concept of Income Tax Planning and Tax Saving Strategies

Tax planning is a plan of monetary affairs in such a way that without breach of any legal provisions, assesses are taken full benefit of all exemptions, deductions, rebates and other reliefs allowed under the Income Tax Act. 1961. Tax planning is lawful and ethical. Tax planning is efficiently executed only when the tax payers are entirely conscious regarding the several provisions of the income tax act, allowances, perquisites, deductions under section 10 and section 80C to 80U preferably for an individual salaried assessee. Strategies for reducing the tax burden is a main element of tax planning. As per the provisions of income tax act, the person is liable to pay tax if they have earned income which is above the limit as prescribed by the income tax law. Tax planning includes an effective use of various provisions and loopholes of tax laws to decrease the burden of tax.

The present study assessed the vigilance on tax planning among faculties of government colleges in Rajasthan. Arranged questionnaire was distributed to the respondents for collect the data. For the study purpose 250 respondents were elected from different government colleges in different districts of Rajasthan. Teaching faculties of government colleges in Rajasthan are obedient in paying taxes.
Objective of study

The main objective of the present study is to analysis of Income-Tax planning and strategies for tax savings among teaching faculties of government colleges in Rajasthan. The other objectives are:

1. To understand the concept of income tax planning.

2. To identify the level of knowledge on tax planning among faculties of government colleges in Rajasthan.

3. To analysis the approach of academicians regarding tax planning.

4. To conclude the level of consciousness of academicians of government colleges on various tax planning exemption, deductions, relief, rebates.

5. To give suggestions for improving income tax planning.

Significance of the Study

Teaching faculties of government colleges are reflected as the well-educated class of our society and high income earning, who pay regular tax. They look to be more conscious regarding the income tax planning strategies. In that situation, it is important to observe their awareness on strategies of tax planning.

Scope of Study

The study evaluates and analysis the tax planning strategies and awareness thereof, saving habits, investment choices adopted by the faculties of government colleges in Rajasthan for the period covered under study. The income in the study encompasses income from salary, income/loss from house property and income from other sources.
Review of Literature

Antony and Devassykutty (2017), revealed a study on tax planning between academicians for analysis and evaluate the methods of tax planning methods recognized by them. It was initiate that bulk of the academicians are entirely aware regarding deductions, contribution to PF, investment in savings, repayment of home loan. The study suggested that IT authority essential provide awareness programs so as to tax payers can avail the benefits of tax planning.

Ashok Kumar and Uma Maheswari (2014), tried to investigate the investment position of the salaried persons regarding investments. The results showed incomplete awareness regarding the investments.

Sood and Kaur (2015), intended at studying the saving and investment trend of salaried assessee in Chandigarh. The main purposes for saving and investment are education and marriage of children and retirement plans.

Visalakshi and Srividhya (2013), explained regarding relationship between the pattern of investment and saving of college faculties.

Vasanthi (2014) aimed to analyze tax planning form of salaried person, exposed that tax awareness is great. It was clear from the study that employees pay taxes on timely.

Khader (2017), analyzed to determine the level of awareness of tax planning among teachers from M.E.S Ponnani College. The study disclosed that most of them are partially conscious regarding deductions u/s 80, rebate and reliefs.
Methodology

The present study is centered on primary data and secondary data both which are collected from various government colleges in Rajasthan. The period covered under the present study is four financial years from 2019-20 to 2022-23. For analyses and interpretations of income tax planning, several techniques and tools as trend analysis and ratio analysis have been used. Trend analysis decides the tendency which may be decreasing or increasing. Mostly, first year is chosen as the base year and selected as 100. Data of every year is divided by the figure of base year.

For find out the impact of awareness of tax planning regression is also used. The primary data was collected via structured questionnaire form completed by 250 faculties working in different districts of Rajasthan. Secondary data was collected from the reports of account departments of different government colleges in Rajasthan. Books, journals, news papers, various online resources etc. are also used.
Analysis

Table 1: Demographic Profile of Respondents

S. No.

Variables

Profile

No. of respondents

Percentage

Cumulative Percentage

1

Age in year

Below 35

14

5.6

5.6

35-48

182

72.8

78.4

49-60

54

21.6

100

Total

250

100

 

2

Gender

Male

66

26.4

26.4

Female

184

73.6

100

Total

250

100

 

3

Faculty

Science

127

50.8

50.8

 

 

Commerce

31

12.4

63.2

 

 

Arts

92

36.8

100

 

 

Total

250

100

 

4

Income level

Up to 4.80 lakhs

46

18.4

18.4

4.80 lakhs to 15 lakhs

117

46.8

65.2

15 lakhs to 25 lakhs

69

27.6

92.8

25 lakhs and above

18

7.2

100

 

 

Total

250

100

 

Source: Primary survey

Interpretation

The demographic profile of respondents with age group indications that 72.8% of the respondents related to the age group of 35-48 years followed by 21.6% who related to the age group between 49-60 years. It can be understood from the above present that out of 250 respondents, 73.6% (184 respondents) are females and 26.4% (66 respondents) are males. The survey results exposed that majority of the respondents i.e. 46.8% have income level between 4.80 lakhs to 15 lakhs.

Table 2: Benefit of Deductions taken by Faculties

S.No.

Particulars

Section of Income Tax Act, 1961

No. of respondents

 

Percentage

1

Standard Deduction from Salary Head

16(ia)

250

100

 

 

Total

250

100

2

Deduction of Interest on Housing Loan

24B

198

79.2

3

Deductions under chapter VIA:-

 

 

 

 

80C, 80CCC and 80CCD(1)

250

100

 

 

80CCD(1B)

82

32.8

 

 

80D

108

43.2

 

 

80E

54

21.6

 

 

80TTA

248

99.2

 Source: Primary survey

Interpretation

It is apparent from table 2 that all the respondents taken the benefit of standard deductions which is allowed under section 16(ia). 79.2% of total respondents are taken the deduction of interest on housing loan u/s 24B for reducing the tax burden. It is clear from the survey that deduction u/s 80C is the maximum adopted tax saving instrument by the faculties of government colleges in Rajasthan. Deductions under section 80TTA, 80D, 80CCD(1B) and 80E got second, third, fourth and fifth rank respectively which are allowed under chapter VIA of Income Tax Act, 1961.

Table 3: Level of awareness on Strategies of Tax Planning by faculties

Variable

N

Minimum score

Maximum score

Mean score

Std. Deviation

Awareness level of faculties

250

 

2.38

4.08

3.221

0.21427

Source: Primary survey

Interpretation

The level of awareness of faculties on tax planning strategies range in between the scores of 2.38 and 4.08. Mean value for level of awareness is 3.221 it is concluded that the faculties are moderately conscious regarding tax planning strategies. The level of awareness of various sections on Tax Planning were analyzed. For this object a five point scale was used allocating weightage of five points to extremely aware, four points to moderately aware, three point to somewhat aware, two point to slightly aware and one for not at all aware. Analysis was started based on mean values regarding the total respondents.

Table 4: Preparation of Tax Planning

Time period of plan

No. of respondents

Percentage

 

At the starting of the financial year

48

19.2

At the end of the financial year

113

45.2

At any time

56

22.4

No planning at all

33

13.2

Total

250

100

Source: Primary survey

Interpretation

As per Table 4 the results of primary survey only 19.2% comprise themselves in appropriate tax planning, while 45.2% of total respondents try to avoid tax. 33% of total respondents not plan their taxes.

Figure 1


Source: Primary survey

Interpretation

Figure-1 reveals that the mass of respondents 148 (59.2%) and 89 (35.6%) out of total 250 respondents strongly agree and agree about tax planning helps in decreasing the amount of tax burden. There are smaller of respondents who are not clear regarding the usefulness of tax planning in reducing tax liability, as disclosed by the very less percentages of respondents who fall into the neutral and disagree categories 11 (4.4%) and 2 (0.8%) respectively.

Table 5: Faculties are usually aware of all the Deductions and Exemptions

S.No.

 

Responses

Frequency

Percent

 

1

Strongly Agree 

3

1.2

2

Agree

163

65.2

3 

Neutral

76

30.4

4

Disagree

8

3.2

 

Total

250

100

Source: Primary survey

Interpretation

Table 5 shows that there are a limited knowledge among faculties regarding the exemptions and deductions of income tax act. 1.2% and 65.2% of the total respondents strongly agree and agree that faculties of government colleges in Rajasthan are normally aware of the deductions and exemptions allowed in income tax act, 1961. Unawareness about deductions and exemptions is shown that approx. 30.4% of total respondents are neutral on this statement. 3.2% of total respondents are disagrees. This indicates that most of respondents consider that faculties are aware regarding deductions and exemptions allowed in IT act, a significant number of respondents held a neutral position.
Findings

1.     All the respondents taken the benefit of standard deductions u/s 16(ia) and deduction of Sec. 80C. 79.2% of total respondents are taken the deduction of interest on housing loan u/s 24B.

2.     Mixed awareness on deductions 65.2% agree, 30.4% neutral, 3.2% disagree among faculties.

3.     Faculties are moderately conscious regarding tax planning strategies.  

4.     The highest taxpayers are found from the age group of 49-60.

5.     Out of 250 respondents, 73.6% (184 respondents) are females and 26.4% (66 respondents) are males.

6.     Deductions under section 80TTA, 80D, 80CCD(1B) and 80E got second, third, fourth and fifth rank respectively.

7.      Only 19.2% comprise themselves in appropriate tax planning, while 45.2% of total respondents try to avoid tax. 33% of total respondents not plan their taxes.

8.     There are a limited knowledge among faculties regarding the exemptions and deductions.

9.   Most of respondents consider that faculties are aware regarding deductions and exemptions allowed, a significant number of respondents held a neutral position.
Conclusion

1.     The study concludes that Most of the respondents are prompt in paying their tax responsibilities. The basic challenge faced by these respondents is that the lack of consciousness regarding the income tax provisions. They are paying huge amount of tax.

2.     The level of awareness regarding exemption of HRA, deductions u/s 80C to 80U, reliefs and rebates is high with respect to commerce faculty. Arts stream academicians had moderate level of awareness.

3.      Deduction u/s Sec. 80C, 80CCC, 80CCD(1), 80CCD1B, 80D, 80E deduction are the major accepted tax savings instruments.

4.      Major faculties are obedient in paying taxes by TDS deduction by the government colleges.

5.     Faculties are moderately awake about the Income tax provisions and tax planning strategies.  

6.   In the present scenario the level of awareness is low as there are frequent changes in tax laws, compliance procedures, complexity to understand the taxation language.
Suggestions for the future Study 1. It may be suggested that tax planning should be from the beginning of financial year instead of last moment of the financial year.
2. Workshops and seminars as well as training program should be conducted to create awareness amongst faculties about the tax planning. Also tax planning awareness program to be conducted by the Income tax authorities.
References

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2. Singhania, V.K., Singhania, Kapil, “Direct Taxes Law & Practice” Taxmann, New Delhi, Professional Edition, A.Y. 2022-23.

3. Dubey, B. S., “Tax Planning” Laxmi Publications, New Delhi, edition assessment year 2023-23.

4. Devassykutty, R.,  Antony, R. P. (2017, March), “A Study on Tax Planning Among Academicians with Special Reference to Ernakulam”, De Paul Journal of Scientific Research, 4(1), 124-133.

5. Bhardwaj, B., Sharma, N., & Sharma, D. (2013). Income, saving and investment pattern of employees of Bahra University. International Journal of Management and Business Studies, 3(1), 137-141.

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8. Pallavi, V & Anuradha P.S.,(July-Dec.,2017),“Tax Planning and Investment Pattern of Academicians: A Study of Educational Institutions in Bengaluru”, Journal of Indian Taxation, Volume 4, Issue 2,  pp 112-126.

9. Chen, W. (2018), “Study on the Planning of Personal Income Tax Salaried College Staff” ,4th International Conference on Social Sciences, Modern Management and Economics (SSMME 2018), 212-216.

10. Khader, L. A. (2017) “Tax planning among college teachers, with special reference to mes ponnani college”, Intercontinental Journal of Finance Research Review, 5(2), pp 34-44.

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