Tax planning is a big business in India and as per a survey of 1,169 salaried individuals from the IT/ITeS segment in the age group of 22-54 years (across the cities of Bangalore, Chennai and Hyderabad):
- 70% of those surveyed did not have any medical insurance and about 18 per cent only had medical insurance cover provided by their employers
- 36% of the respondents did not have any kind of life insurance in Hyderabad.
- more than 60 per cent had not fully utilised the limit of Rs 1 lakh
- 11 per cent of the respondents in Hyderabad used only Provident Fund (PF) investments, among the various tax saving options available.
- Only 18 per cent of those surveyed featuring it in their portfolio of tax saving instruments. [source]
Lack of awareness about tax instruments and investment options is where lies a huge opportunity for players in this space.
What’s your opinion?
Yes, it’s a proven fact that many salaried persons are not aware about the ways and means of saving tax.
Though we cannot expect them to be completely aware of what is what, we could strongly suggest that the HR department of every company should organise for frequent sessions on “Tax saving methodologies” which would help the employees to utilise whatever way they could afford for.
Bala, http://www.cogzidel.in
More than lack of awareness, i observe these characteristics…
1. Investment options are too complex to understand and make a choice.
2. Folks live paycheck to paycheck: Spend all that they earn.
Isn’t that what we see most of the time?
-Mahesh
Celebrating Life…
It’s shocking to note that 70% don’t have any medical cover.. and that only 18% get their medical cover from their employers.
I guess most like to live on the edge.
Sometimes, it’s better to pay tax than invest in some of the tax-saving instruments. ULIP comes to mind as an example of a poor tax saving instrument.
Medical cover & insurance shouldn’t be thought of as *just* a tax saving instrument! It helps you in times of need.