Indian IT employees careless about tax planning

By SiliconIndia   |   Friday, 30 January 2009, 03:18 Hrs   |    9 Comments
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Chennai: The techies in three major cities - Chennai, Bangalore and Hyderabad are not taking care about financial and tax planning, according to 70 percent of the respondents of the annual tax survey conducted.

The survey conducted by Right Horizons, an investment advisory firm, among 1,169 salaried individuals also finds that 82 percent of the respondents do not have any medical insurance and only 13 percent has medical insurance cover provided by their employees, reported The Times of India. As per the survey, 36 percent of the respondents in Chennai do not have any life insurance policies. 20 percent of the employees use PF investments as it is mandatory in many companies.

"Investments under Section 80C earn tax breaks for investors up to a maximum limit of Rs 1 lakh. Therefore, it comes as a surprise that more than 75 percent of those surveyed had not fully utilized the limit and many of them actually went on to pay income-tax which could have been saved through better financial or tax planning," the survey said.

The study clearly indicates that traditional investments such as PPF, NSC and life Insurance are still dominating in the investment profile with 58 percent of the respondents have these kinds of investments only. The survey also shows that only 35 percent have equity-linked savings scheme (ELSS) in their tax saving portfolio, while 5 percent respondents had more than 50 percent exposure to mutual funds as part of the 80C investments.

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