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A
PROJECT REPORT
ON
“A STUDY OF VARIOUS SOURCES OF INCOME AND INCOME TAX LIABILITY OF AN
INDIVIDUAL ASSESSEE”
AT
SANTOSH & CO. CHARTERED ACCOUNTANTS, PUNE
SUBMITTED BY
HARSHAVARDHAN RATNAKANT KOLAPE
(STREAM- FINANCE)
UNDER THE GUIDANCE OF
“PROF. SUCHETA CHAUDHARI”
SUBMITTED TO
SAVITRIBAI PHULE PUNE UNIVERSITY
IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD DEGREEOF
MASTERS OF BUSINESS ADMINISTRATION (MBA)
THROUGH
NBN SINHGAD SCHOOL OF MANAGEMENT STUDIES, AMBEGAON (BK), PUNE
DECLARATION
I HARSHAVARDHAN RATNAKANT KOLAPE , the undersigned, hereby declare that the project report entitled A STUDY OF VARIOUS SOURCES OF INCOME AND TAX LIABILITY OF AN INDIVIDUAL ASSESSEE written and submitted by me to the Savitribai Phule Pune University, Pune in partial fulfillment of the requirement for the award of degree of MBA under the guidance of PROF. SUCHETA CHAUDHARI is my original work except the topics on organizational profile and the conclusion drawn therein are based on the material collected by myself. Place: Pune HARSHAVARDHAN RATNAKANT KOLAPE Date: STUDENT NAME
GUIDE’S CERTIFICATE
This is to certify that the project report entitled “ A STUDY OF VARIOUS SOURCES OF INCOME AND INCOME TAX LIABILITY OF AN INDIVIDUAL ASSESSEE ” is being submitted here with for the award of the degree of Master of Business Administration of Savitribai Phule Pune University is the result of the original research work completed by HARSHAVARDHAN RATNAKANT KOLAPE Under my supervision and guidance. To the best of my knowledge and belief the work embodied in this project report has not formed earlier basis for the award of any degree or similar title of this or any other university or examining body. Place:- Pune Prof. Sucheta Chaudhari Date :- GUIDE NAME
ACKNOWLEDGEMENT
I take this opportunity to express my profound gratitude and deep regards to my guide PROF. SUCHETA CHAUDHARI for her exemplary guidance, monitoring and constant encouragement throughout the course of this project. The blessing, help and guidance given by his/her time to time shall carry me a long way in the journey of life on which I am about to embark. I also take this opportunity to express a deep sense of gratitude to REPORTING AUTHORITY IN ORGANIZATION for his cordial support, valuable information and guidance which helped me in completing this project through various stages. I wish to express a special thanks to all teaching and non-teaching staff members of NBN SINHGAD SCHOOL OF MANAGEMENT STUDIES, Pune their continuous support. I would like to acknowledge all my family members, relatives and friends for their help and encouragement. Place: Pune. HARSHAVARDHAN RATNAKANT KOLAPE Date: STUDENT NAME
Executive Summary
In India, there is different tax levied on different income groups of people and also by the age of the assesses. There is different income tax for residents of India and Non-residents in India. There is also a different income tax levied on a person below 60 years of age and a senior citizen. To study the taxation of the salaried employees under different tax slabs and finding out the various methods of tax planning for individuals of different income groups to reduce the tax liability. Income tax in India is known as the progressive tax that means it increases in proportion with the income of an individual. This is done to bring the equality in the wealth distribution of the country. Income tax in India is governed by the Income tax Act 1961 (Amended as The Finance Act 2021). Financial year- It is the year in which an individual earns the income. It starts from 1st April and ends on the 31st March of the next calendar year. Salary is one of the heads of income of an individual. Salary basically consists of basis salary, allowances and perquisites. Taxation of this head and proper usage of allowances is an important part of financial planning to reduce tax payment. As different income slabs have different rates accordingly planning of salary head is needed. People are conscious about their income and also, they try to save money in other areas but they fail to save the money in the important area like their taxation of the income. If saved most of the taxes it can result into the increase in the purchasing power of the salaried employees. But most of the people are ignorant about the tax deducted by their employer. Some of the people want refund, as lots of taxes are deducted throughout the year but they are unable to make the right investments which can save their taxes.
CHAPTER 1
INTRODUCTION
People try to save their money in various things by availing the best and reasonable optionbut when it comes to income tax deducted on their income, they think it is the natural part of the process of job. They are negligent towards saving the amount of taxes by making certain tax saving investments. People should be made aware of the tax saving investments and their use to reduce the tax liability.
1.1. 2 Indian scenario of taxation.
Tax structure in India is getting better and better every year as Budget of India gets declared. The introduction of GST (Goods and services tax) has wiped out all the other taxes withcertain exceptions. The percentages and conditions for tax payable on income are also changing every year as per the requirements of Govt. Income tax is considered as the revenue for the govt. which the Govt. uses for services to be provided in the country. In India, there is different tax levied on different income groups of people and also by the age of the assesses. There is different income tax for residents of India and Non-residents in India. There is also a different income tax levied on a person below 60 years of age and a senior citizen. In short Indian Govt. is making an effort to minimize the huge income inequality in India. But there is not a complete cooperation from the tax payers of India. Tax evasion, Non-payment of taxes and showing less income than earned are problems for the income tax department of India. This is because there is already an indirect tax paid by the tax payers while purchasing certain goods or services. People think income tax is the additional tax that has been taken by them. So, they find various ways to avoid the payment of taxes. As the inflation rate is also increasing the value of money received by individuals is decreasing; so, people are more into saving the income earned by them.
1.2 Objectives of the Study:
- To study the taxation of the salaried employees under different tax slabs and finding out the various methods of tax planning for individuals of different income groups to reduce the tax liability.
- To study the income tax in India and get a knowledge about various tax saving investments under different sections
- To study the client’s pattern of behavior for investing the amount in tax saving investment to check their knowledge and application about the tax saving investments.
- Make people aware about the Income tax structure and the mechanism of the Income tax in case of the employees working in the Information technology sector.
- Make people aware about the post effects of several investments resulting into the excess of the tax liability.
1.4 Limitations of the Study:
- This project studies the tax planning for individuals assessed to Income Tax
- The study relates to non-specific and generalized tax planning, eliminating the need of population analysis
- Basic methodology implemented in this study is subjected to various pros. And cons, and diverse insurance plans at different income levels of individual assessees.
- This study may include comparative and analytical study of more than one tax saving plans and instruments.
- This study covers individual income tax assessees only and does not hold good for corporate tax payers.
- The tax rates, insurance plans and premium are all subject to FY 2022-23 Only.
CHAPTER 2
PROFILE OF ORGANIZATION
2. 2 VISION STATEMENT:
Our vision is to be the most highly respected and trusted professional accounting and audit firm in India, where each client comes with a firm belief that his interests will be taken care of by a team who treats his problems as their own and find solutions which best suits his interest.
2. 3 MISSION STATEMENT:
Our mission is to provide businesses, entrepreneurs and individuals with the highest quality accounting, auditing, tax planning and business advisory services. The core focus is to be on delivering the service in a timely, efficient and innovative manner by a professional team that works together to serve the best interest of the client
2. 4 HISTORICAL BACKGROUND:
Santosh & Co. was established on March 2016 by Mr. Rahul Chate. Our firm has witnessed the tumultuous changes that have transformed the landscape of India over last 6 years. Our constant endeavor is to be committed to our clients’ needs through our personalized care and attention in a professional environment, striving for the pinnacles of the perfection in all area of services, employing the latest technological tools and industry-based practices. The company is a professionally managed firm. The team consist of Chartered accountant, corporate financial advisors and tax consultants. The firm represents a combination of specialized skills, which are geared to offers sound financial advice and personalized proactive services. Those associated with the firm have regular interaction with the industry and other professionals which enables the firm to keep pace with contemporary developments and to meet the needs of its clients.
2. 5 ORGANISATIONAL CHART:
2. 6 .4 Company Law Matters
- Incorporation of company.
- Consultancy on Company Law matters.
- Planning for Mergers, Acquisitions, De-mergers, and corporate re-organizations.
- Filing of annual returns and various forms, documents.
- Clause 49 review for compliance with fiscal, corporate and tax laws.
- Secretarial Matters including share transfers.
- Maintenance of Statutory records.
- Consultancy on Public/Rights/Bonus Issue of shares.
- Change of Name, Objects, Registered Office, etc.
2. 6 .5 Outsourcing Accountants
- Annual financial reports preparation
- Preparation of general and special purpose statutory accountants
- Cash management reporting
- Budgeting and Cash Flow planning
- Financial Analysis
- General accounting support as required by client
2. 6 .6 Corporate Finance:
- Preparation of project reports for different purposes.
- Project reports for SME’s.
- Providing the client with a road map for efficient performance.
CHAPTER 3
CONCEPTUAL BACKGROUND
