Tax saving instruments and its impact on tax liability of salaried employees
Keywords:
Salaried Employees, Tax Liability, Tax- Saving Instruments, Financial Return & Security, Financial Literacy.Abstract
Tax-saving instruments support salaried employees in managing taxable income while building savings and financial security. This study examines the tax-saving instruments available to salaried individuals, the main factor that affect their saving choice, & their perceived impact on tax liability. The study used a descriptive research approach, data was collected from 110 salaried employees in Bengaluru through a structured questionnaire, and convenience sampling was used to select the respondents. The responses were analysed using descriptive statistics and multiple regression analysis. The study focused on factors such as financial literacy, saving level, tax-planning behaviour, financial return and security, and exemptions and deductions. The findings show that most employees have moderate to good knowledge about tax-saving options, and they mostly prefer investments that provide safety, stable returns, and long-term financial benefits. The regression analysis shows that the model explains 80.6% of the variation in perceived tax liability and is statistically significant. Among all the factors, financial literacy and financial return and security have a positive influence, while financial return and security has the strongest impact. Overall, the study shows that better financial knowledge and choosing suitable tax-saving investments can help salaried employees make better use of tax benefits and manage their tax liability more effectively.
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