A

SYNOPSIS REPORT
ON
INCOME TAX PLANNING IN INDIA
AT
HDFC BANK LTD
Submitted
By
MOHAMMAD HRISHAD
H.T.NO: 130320672017
PROJECT SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

Department of Business Administration

AURORA POST GRADUATE COLLEGE

PEERZADIGUDA

(Affiliated to Osmania University)

2020-2022
 AURORA POST GRADUATE COLLEGE
PEERZADIGUDA

Department of Management

SYNOPSIS

Title of the Project INCOME TAX PLANNING IN

Student Name : MOHAMMAD HRISHAD

Hall Ticket Number : 130320672017

Signature of the Student :

Signature of the Guide :

Income Tax Act, 1961 governs the taxation of incomes generated within India and of
incomes generated by Indians overseas. The study aims at presenting a lucid yet simple
understanding of taxation structure of an individual’s income in India for the assessment year
2018-2020.

Income Tax Act, 1961 is the guiding baseline for all the content in the report and the tax
saving tips provided herein are a result of analysis of options available in the current market.
Every individual should know that tax planning in order to avail all the incentives provided
by the Government of India under different statureis legal.

The project covers the basics of the Income Tax Act, 1961 as amended by the Finance Act
2007, and broadly presents the nuances of prudent tax planning and tax saving options
provided under these laws. Any other hideous means to avoid or evade tax is a cognizable
offence under the Indian constitution and all the citizens should refrain from such acts.

The Income Tax Act, 1961 is an act to levy, administer, collect, and recover income tax in
India. The act is effective from 1 April 1962. It consists of 298 sections 14 schedules. The act
helps determine a taxpayer's taxable income, tax liability, appeals, penalties, and prosecution.
The various heads for which you have to pay income tax include:
1. Salary
2. Income from house property
3. Capital gains
4. Profit and gains from business or profession
5. Income from other sources

Every year, the Indian government presents a finance budget during the month of February.
The budget brings in various amendments to the Income Tax Act. This includes changes in
tax slabs wherever applicable.
INCOME TAX IN INDIA

To run a nation judiciously, the government needs to collect tax from the eligible citizens;

paying taxes to the local government is an integral part of everyone’s life, no matter where

we live in the world. Now, taxes can be collected in any form such as state taxes, central

government taxes, direct taxes, indirect taxes, and much more. For your ease, let’s divided

the types of taxation in India into two categories, viz. direct taxes and indirect taxes. This

segregation is based on how the tax is being paid to the government.

Income tax is a type of tax that the central government charges on the income earned during a
financial year by the individuals and businesses. Taxes are sources of revenue for the
government. Government utilizes this revenue for developing infrastructure, providing
healthcare, education, and subsidy to the farmer/ agriculture sector and in other government
welfare schemes. Taxes are mainly of two types, direct taxes and indirect form of taxes. Tax
levied directly on the income earned is called as direct tax, for example Income tax is a direct
tax. The tax calculation is based on the income slab rates applicable during that financial
year.

HOW INCOME TAX WORKS

Most countries employ a progressive income tax system in which higher-income earners pay
a higher tax rate compared to their lower-income counterparts. The U.S. imposed the nation's
first income tax in 1862 to help finance the Civil War. After the war, the tax was repealed; it
was reinstated during the early 20th century.

In the U.S., the Internal Revenue Service (IRS) collects taxes and enforces tax law. The IRS
employs a complex set of rules and regulations regarding reportable and taxable income,
deductions, credits, et al. The agency collects taxes on all forms of income, such as wages,
salaries, commissions, investments, and business earnings.

The personal income tax the government collects can help fund government programs and
services, such as Social Security, national security, schools, and roads.
TYPES OF INCOME TAX PAYERS
The Income tax Act has classified the types of taxpayers in categories so as to apply different
tax rates for different types of taxpayers. Taxpayers are categorized as below:

 Individuals, Hindu Undivided Family (HUF), Association of Persons (AOP) and

Further, Individuals are broadly classified into residents and non-residents. Resident
individuals are liable to pay tax on their global income in India i.e. income earned in India
and abroad. Whereas, those who qualify as Non-residents need to pay taxes only on income
earned or accrued in India. The residential status has to be determined separately for tax
purposes for every financial year on the basis of the individual tenor of stay in India. Resident
Individuals are further classified into below mentioned categories for tax purposes-

 Individuals less than 60 years of age

The Project Income Tax at HDFC bank helps to analyze the income tax and the collection,
recovery and administration of income tax is regulated by income tax act, 1961. The amount
of income tax has to pay depends on various factors. We have government at the local, state
and the national levels. These governments have various parts to them including legislatures,
executives, judges and many others. The money these government workers receive to do their
jobs comes from taxes.

Paying taxes is considered a civic duty, although doing so is also a requirement of the law. If
you do not pay your taxes, the government agency that oversees taxes – the Internal Revenue
Services will require to pay your taxes or else face penalties, such as fines or punishments.
The money you pay in tax uses for paying salaries of government workers and also uses for
welfare of the citizens and for the development of safe and secure infrastructure.

1.3 SCOPE OF THE STUDY

The project studies the tax planning for individual assessed to income .The Study relates to
nonspecific and generalized tax planning, eliminating the need of sample/population analysis.
Basic Methodology implemented in the study is subjected to various pros & cons and diverse
insurance plans. The study may include comparative and analytical study of more than one
tax saving plans and instruments.The study covers individual income tax assesse only and
does not hold good for corporate tax payers. The tax rates, insurance plans, and premium are
all subjected to FY 2018-2020
1.4OBJECTIVE OF THE STUDY

 The objective of income tax on an accrual basis is to recognize the amount of current
and deferred taxes payable or refundable at the date of the financial statements. As a result of
all events that have been recognized in the financial statements and (b) as measured by the
provisions of enacted tax laws.
 To study taxation provisions of The Income Tax Act, 1961 as amended by Finance
Act, 2020.
 To explore and simplify the tax planning procedure from a layman’s perspective.
 To present the tax saving avenues under prevailing statures.
 It is imposed to raise government revenue for the welfare of the people and to
maintain the economic situation.
 To know about the perception of income tax payers such as banks.
1.5 RESEARCH METHODOLOGY

DATA COLLECTION

Secondary Data:-

Secondary research means to reprocess and reuse collected information as an indication for
betterment of service of the products. Secondary data refers to the existing data that had been
collected with an objective other than research. And the secondary data collection method
includes

● Various publications of central, state and local governments.

1.6 TOOLS AND TECHNIQUES FOR ANALYSIS

 Banking Transaction Tax: Banking Transaction Tax shall be a part of a big whole
reform. And it includes scrapping all direct and the indirect taxes excluding import and
customs duty and recalling high denomination currency notes and ensuring that all high value
transaction are made through banking systems like Cheque, DD, Online and electronic and
fixing the limit of cash transactions and stopping taxation on cash transactions.
 Tax Deduction at Source: Tax Deduction at Source in India is a means of collecting
tax on income, dividends or asset sales, by requiring the payer to deduct tax due before
paying the balance to the payee. Under the Indian Income Tax Act of 1961, income tax must
be deducted at source as per the provisions of the Income Tax Act 1961.
5.1 LIMITATIONS

 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
sample/population analysis.
 Basic methodology implemented in this study is subjected to various pros & 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 taxpayers.
 The tax rates, insurance plans, and premium are all subject to FY 2018-2020only.