INCOME TAX PLANNING WITH RESPECT TO INDIVIDUAL ASSESSEES

Abstract

Tax planning plays a vital role in an individual's overall financial management. It involves developing strategies to manage income, savings, and investments legally to minimize tax liability while maximizing wealth creation. The primary objective of this study, titled "Tax Planning for Individual Taxpayers," is to understand the awareness, practices, challenges, and effectiveness of tax planning among different taxpayer categories. The study was conducted through a structured survey targeting employees, self- employed individuals, and business owners of various income and age groups. Responses revealed varying levels of awareness of deductions available under sections such as Sections 80C and 80D, as well as exemptions such as House Rent Allowance (HRA) and Holiday Travel Allowance (LTA). The key findings indicate that while a significant proportion of individuals are aware of basic tax-saving options, many still lack in-depth knowledge of broader planning strategies and new provisions such as the new tax regime. It was observed that most individuals rely heavily on traditional tax- saving instruments such as the Public Provident Fund (PPF), life insurance policies, and fixed deposits, while more dynamic options such as Equity-Based Retirement Savings Plans (ELSS) and the National Pension System (NPS) remain underutilized. The analysis also highlights that the choice between the old and new tax regimes remains largely dependent on income levels and the extent of available deductions. A significant number of respondents expressed difficulties related to the complexity of tax legislation, frequent changes in provisions, and a lack of professional support. Based on these findings, it is recommended: • Greater emphasis be placed on financial education programs focused on tax planning. • Simplification of tax procedures and clear communication about tax regime choices are necessary. • Digital platforms and fintech solutions can play a crucial role in enabling individuals to plan and file their taxes effectively. vii Overall, this research highlights the importance of proactive and informed tax planning, not only to reduce the tax burden but also to align tax-saving instruments with long-term financial goals. Improving awareness and streamlining processes can significantly improve tax compliance and the financial well-being of taxpayers.