factors influcing investment in tax saving scheme word final1

8/13/2019 Factors Influcing Investment in Tax Saving Scheme Word Final1

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CONTENTS

Sr. NO TOPIC PAGE

Chapter 1 Introduction 2

1.1 Objective of the study 4

Chapter 2 Analysis of Investment 5

2.1 Characteristics, Importance & Types of Investment 6

2.2 Investment Planning 7

Chapter 3 Investment Avenues 9

Chapter 4 Research ethodology 19

4.1 !" Test 22

4.2 Analysis of #ariance $A%O#A 23

Chapter 5 Analysis & Interpretation 25

Chapter 6 'indings 38

Chapter 7 Recommendations 40

Chapter8 Conclusion 41

Chapter 9 (ibliography 42

Chapter 10 Anne)ure 43

CHAPTER - 1 INTRO!CTION

"hat #$ ta% p&a''#'( a') *hat +, ,&) (a#' /r, #t


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A good citi*en should al+ays pay ta) (ut he should not end up paying unnecessary ta) A

smart citi*en is one +ho pays ta) but also ma-es ma)imum use of provisions available in Ta)

.a+s to minimi*e it This can be achieved through scientific Ta) planning Ta)

Planning involves measures +ithin the current legislation dealing +ith the choice of time,

location and activities, +ith creation and support of the most effective schemes and contractual

relationships to increase the cash flo+s due to minimi*ation of ta) payments Through proper

ta) planning, you +ill not only lo+er amounts of ta) payments +ith respect to basic ta)es, but

you/ll also create a +ealth stream for achieving long term goals

Opt##at#,' ,/ ta% pa+e't$ #'&)e$

0 1)amination of the ta) saving schemes available2

3 4hort listing the most suitable schemes for your benefit2

5 1)pert opinions on ta)ation problems2

Ta) planning involves conceiving of and implementing various strategies in order to minimi*e

the amount of ta)es paid for a given period 'or a small business, minimi*ing the ta) liability

can provide more money for e)penses, investment, or gro+th In this +ay, ta) planning can be a

source of +or-ing capital According to The 1ntrepreneur aga*ine 4mall (usiness

Advisor, t+o basic rules apply to ta) planning 'irst, a small business should

neverincuradditional e)penses only to gain a ta) deduction 6hile purchasing necessary

e7uipment prior to the end of the ta) year can be a valuable ta) planning strategy, ma-ing

unnecessary purchases is not recommended 4econd, a small business should al+ays attempt

to deferta)es +hen possible 8eferring ta)es enables the business to use that money interest9

free, and sometimes even earn interest on it, until the ne)t time ta)es are due

1)perts recommend that entrepreneurs and small business o+ners conduct formal ta) planning

sessions in the middle of each ta) year This approach +ill give them time to apply their

strategies to the current year as +ell as allo+ them to get a jump on the follo+ing year It is

important for small business o+ners to maintain a personal a+areness of ta) planning issues in

order to save money 1ven if they employ a professional boo--eeper or accountant, small

business o+ners should -eep careful tabs on their o+n ta) preparation in order to ta-e advantage
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of all possible opportunities for deductionsand ta) savings :ou should notblindlyallo+

someone else to ta-e complete charge of your ta) paying responsibilities; In addition, as

'rederic- 6 8ailey +rote in his boo- Ta) 4avvy for 4mall (usiness, ;Ta) -no+ledge has

po+erful profit potential !no+ing +hat the ta) la+ has to offer can give you a far better

bottom line than your competitors +ho don/tbotherto learn;

Ta) planning is an integral piece of a proper financial plan The fact is many people do

not concentrate on ta) planning I have seen this truth in my practice through ne+ clients +ho

often tell me, s des- and hope for the best This is a recipe for

disaster

?nderstanding the impact ta)es +ill have on your financial +ell9being is essential, especially for

those +ho are self9employed Ta-e time to plan for the current year and ma-e adjustments to

create positive momentum There are al+ays ne+ la+s and changing provisions in the ta) code,

+hich, again illustrate the importance of planning

Ta-ing control of your ta)es and saving ta) dollars is +hat ta) planning is all about 4ome of the

biggest savings associated +ith ta) planning can come from ideas that are very simple, such as

saving a percentage of your income to cover estimated ta)es or retirement contributions $if you

are self employed, or increasing your @0!B@5( contribution +hile adjusting your 69@ so

your paychec- is not affected $for those +ho are employees

.i-e many other aspects of your financial life, through -no+ledge and understanding can come

clarity and improvement Ta-e control of your ta)es Remember that ta)es are the single largest

recurring e)pense that must of us +ill have throughout our lifetime The ta) code is 7uite

complicated, so tal- +ith your 'inancial Advisor or ta) preparer about helping you planaccordingly

1.1 OECTIES O THE ST!
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The main objective of the study is to find out the investment pattern of the

investors in various Investment Avenues

To determine +hat factors influence them +hile they choose a particular

investment

To find out +hether they are satisfied +ith their investment decision or not

?nderstanding the impact ta)es +ill have on your financial +ell9being is

essential, especially for those +ho are self9employed

1)amination & understanding the investor perception in the ta) saving

schemes +hich is available


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CHAPTER 2 ANA:SIS O INEST;ENT

"HAT IS INEST;ENT

Investment is the activity, +hich is made +ith the objective of earning some sort of positive

returns in the future It is the commitment of the funds to earn future returns and it involves

sacrificing the present investment for the future return 1very person ma-es the investment so

that the funds he has increases as -eeping cash +ith himself is not going to help as it +ill not

generate any returns and also +ith the passage of time the time value of the money +ill come

do+n As the inflation +ill rise the purchasing po+er of the money +ill come do+n and this

+ill result that the investor +ho does not invest +ill become more poor as he +ill not have any

funds +hose value have been increased Thus every person +hether he is a businessman or a

common man +ill ma-e the investment +ith the objective of getting future returns

TPES O INEST;ENT-

There are basically three types of investments from +hich the investors can choose The three

-inds of investment have their o+n ris- and return profile and investor +ill decide to invest

ta-ing into account his o+n ris- appetite The main types of investments are 9

E,',# #'


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These investments refer to the investments made by the common investor in his o+n small

assets li-e the television, car, house, motor cycle These types of investments are termed as the

household investments 4uch types of investment are important for the domestic economy of the

country 6hen the demand in the domestic economy boost the overall productions and the

manufacturing in the industrial sectors also goes up and this causes rise in the employment

activity and thus boost up the D8P gro+th rate of the country The organi*ations li-e the

Central 4tatistical Organi*ation $C4O regularly ta-es the study of the investments made in the

household sector +hich sho+s that the level of consumptions in the domestic mar-ets

CHARACTERISICS O INEST;ENT

Certain features characteri*e all investments The follo+ing are the main characteristic feature 9

1. Retr'-

All investments are characteri*ed by the e)pectation of a return In fact, investments are made

+ith the primary objective of deriving a return The return may be received in the form of yield

plus capital appreciation The difference bet+een the sale price & the purchase price is capital

appreciation The dividend or interest received from the investment is the yield 8ifferent types

of investments promise different rates of return The return from an investment depends upon

the nature of investment, the maturity period & a host of other factors

2. R#$= -

Ris- is inherent in any investment The ris- may relate to loss of capital, delay in repayment of

capital, nonpayment of interest, or variability of returns 6hile some investments li-e

government securities & ban- deposits are almost ris- less, others are more ris-y The ris- of an

investment depends on the follo+ing factors

The longer the maturity period, the longer is the ris-

0 The lo+er the credit +orthiness of the borro+er, the higher is the ris-

The ris- varies +ith the nature of investment Investments in o+nership securities li-e e7uity

share carry higher ris- compared to investments in debt instrument li-e debentures & bonds

3. Sa/et+ -


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The safety of an investment implies the certainty of return of capital +ithout loss of money or

time 4afety is another features +hich an investors desire for his investments 1very investor

e)pects to get bac- his capital on maturity +ithout loss & +ithout delay

4. :#>#)#t+ -

An investment, +hich is easily saleable, or mar-etable +ithout loss of money & +ithout loss of

time is said to possess li7uidity 4ome investments li-e company deposits, ban- deposits, PO

deposits, %4C, %44 etc are not mar-etable 4ome investment instrument li-e preference shares

& debentures are mar-etable, but there are no buyers in many cases & hence their li7uidity is

negligible 17uity shares of companies listed on stoc- e)changes are easily mar-etable through

the stoc- e)changes

An investor generally prefers li7uidity for his investment, safety of his funds, a good return +ith

minimum ris- or minimi*ation of ris- & ma)imi*ation of return

I;PORTANCE

In the current situation, investment becomes necessary for everyone & it is important & useful

in the follo+ing +ays

1. Ret#ree't p&a''#'( -

Investment decision has become significant as people retire bet+een the ages of EE & F Also,

the trend sho+s longer life e)pectancy The earning from employment should, therefore, be

calculated in such a manner that a portion should be put a+ay as a savings 4avings by

themselves do not increase +ealth2 these must be invested in such a +ay that the principal &

income +ill be ade7uate for a greater number of retirement years Increase in +or-ing

population, proper planning for life span & longevity have ensured the need for balanced

investments

2. I'rea$#'( rate$ ,/ ta%at#,' -

Ta)ation is one of the crucial factors in any country, +hich introduce an element of compulsion,

in a person>s saving In the form investments, there are various forms of saving outlets in our

country, +hich help in bringing do+n the ta) level by offering deductions in personal income


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'or e)amples9 ?nit lin-ed insurance plan, .ife insurance, %ational saving certificates,

8evelopment bonds, Post office cumulative deposit schemes etc

3. Rate$ ,/ #'tere$t -

It is also an important aspect for sound investment plan It varies bet+een investment & another

This may vary bet+een ris-y & safe investment, they may also differ due different benefits

schemes offered by the investments These aspects must be considered before actually investing

The investor has to include in his portfolio several -inds of investments stability of interest is as

important as receiving high rate of interest

4. I'/&at#,' -

4ince the last decade, no+ a day>s inflation becomes a continuous problem In these years of

rising prices, several problems are associated coupled +ith a falling standard of living (efore

funds are invested, erosion of the resource +ill have to be carefully considered in order to ma-e

the right choice of investments The investor +ill try & search outlets, +hich gives him a high

rate of return in form of interest to cover any decrease due to inflation

5. I'


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CHAPTER 3 INEST;ENTS AEN!ES

There are various investments avenues provided by a country to its people depending upon the

development of the country itself The developed countries li-e the ?4A and the Hapan provide

variety of investments as compared to our country In India before the post liberali*ation era

there +ere limited investments avenues available to the people in +hich they could invest 6ith

the opening up of the economy the number of investments avenues have also increased and the

7uality of the investments have also improved due to the use of the professional activity of the

players involved in this segment Today investment is no longer a process of trial and error and

it has become a systemati*ed process, +hich involves the use of the professional investment

solution provider to play a greater role in the investment process

1arlier the investments +ere made +ithout any analysis as the comple)ity involved the

investment process +ere not there and also there +as no availability of variety of instruments

(ut today as the number of investment options have increased and +ith the variety of

investments options available the investor has to ta-e decision according to his o+n ris- and

return analysis

A' #'


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4A.. 4A#I%D 4C"114

These are ideal investment vehicles for the small investor the retail resident Indian investors

%onresident Indians are not allo+ed to invest in these schemes .et us loo- at the salient

features of these schemes

0 Public Provident 'und

3 Post Office onthly Income 4cheme

5 Post Office Time 8eposit

@ %ational 4aving Certificate

E !isan #i-as Patra

F Dovernment of India Ta)able 4avings (ond

J 4enior Citi*en 4aving 4cheme

P? Pr,


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This is a very big s+eetener for PP' PP' provides not one, but t+o ta) benefits One, the

investment made in PP' is deductible from your income under 4ection KC of the Income Ta)

Act This means that your entire investment in PP' can be ta) free, subject to the provisions of

4ec KC

P,$t O//#e ;,'th&+ I',e Shee

This scheme appeals to conservative investors +ith traditional values, and for good reason This

scheme offers monthly income and is a safe, guaranteed9by9the9government option 'or retirees,

+ido+s and others loo-ing for a steady income, it can be idealThe Post Office onthly Income

4cheme, or PO I4, is offered by Indian Post Offices A lump sum amount is deposited +ith

the post office and monthly interest earned each month is paid out to youAs the scheme is

offered by post offices, it is bac-ed by the government Thus, the PO I4 is one of the safest

investments available

P,$t O//#e T#e ep,$#t

A Post9Office Time 8eposit Account $R8A is a ban-ing servicesimilar to a (an- 'i)ed

8eposit offered by 8epartment of post, Dovernment of India at all post office counters in the

country The scheme is meant for those investors +ho +ant to deposit a lump sum of money fora fi)ed period2 say for a minimum period of one year to t+o years, three years and a ma)imum

period of five years Investor gets a lump sum $principal L interest at the maturity of the

deposit Time 8eposits scheme return a lo+er, but safer, gro+th in investment

Nat#,'a& Sa


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Investments and Payments

Nat#,'a& Sa


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The 4enior Citi*en 4aving 4cheme 3@ had been introduced by the Dovernment of India for

the benefit of senior citi*ens +ho have crossed the age of F years "o+ever, under some

circumstances the people above EE years of age are also eligible to enjoy the benefits of this

scheme The scheme is not allo+ed for %on Resident Indians $%RIs and "indu ?ndivided

'amiliesThe 4enior Citi*en 4aving 4cheme 3@ offers an interest rate of M percent per annum,

+hich +ill be payable on a 7uarterly basis on the 50st of arch, 5th of Hune, 5th of

4eptember and 50st of 8ecember of every year The interest earned upon the savings is fully

ta)able, and the ta) is deducted at the source itself The tenure of 4enior Citi*en 4aving 4cheme

3@ is E years, +hich can be further e)tended for a period of 5 years by ma-ing an application

to that effect

Special Schemes for Retiring People

G,


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#%e) I',e I'$tre't$ :,'( Ter

This segment deals +ith securities and deposits that have maturity periods one year or longer

and +here couponBinterest is paid periodically, as opposed to discounted prices in case of short

term instruments, discussed earlier These vehicles are attractive for investors +ho see- regular

income +ith relative safety 4ome of the most popular avenues of fi)ed income instruments are

as under

DOI dated securities Dovernment (onds

Dovernment of India borro+s for long term through these securities (an-s, financial

institutions, insurance companies and mutual funds subscribe to these bonds through the auction

process initiated by Reserve (an- of India These bonds are plain vanilla bonds of face value Rs

0B9 +here on the couponBinterest is paid to the holders on half yearly basis These bonds are

7uoted as


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these P4? borro+ings These bonds, as they carry sovereign guarantee, are considered less ris-y

compared to corporate bondsBdebentures but more ris-y compared to Dovernment securities

any 4tate Dovernment corporations have floated bonds in the past and have raised moneys for

infrastructure projects and the

C,rp,rate ,')$De?e'tre$

Companies can borro+ directly from the mar-et through issue of securities, subject to capital

mar-et regulations for meeting their capital re7uirements

The term of the debentures +ill depend upon the need of the company The rate of interest +ill

depend on mar-et conditions as +ell as credit+orthiness of the company and the credit rating

for the debentures

C,rp,rate ep,$#t$

Companies are allo+ed to borro+ from the public through public deposits for meeting their

medium term capital re7uirements

N,' a'=#'( #'a'e C,pa'#e$

Only %('C>s +hich are registered +ith R(I can accept fi)ed deposits An %('C can accept

fi)ed deposits only if credit rating is above inimum rating fi)ed by R(I from time to time To

the investor 'i)ed 8eposits +ith %('C>s offer a higher ris- higher return investment option

a'= )ep,$#t$

(an-s accept fi)ed deposits for short term as +ell long term offering specific fi)ed rate of

interest This is the most popular investment vehicle for the retail investors in India because

investors find ban-s very convenient to deal +ith These deposits are perceived to be highly safe

and li7uid

"hat are the a)


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'8s from reputed ban-s are a very safe investment because such ban-s are carefully

regulated by the Reserve (an- of India, R(I, the ban-ing regulator in India

%ote that company '8s isn/t as safe as ban- '8s because if the company goes ban-rupt

you may lose your money a-e sure you chec- the credit rating of a company before

investing in its '8s :ou should be especially +ary of companies +hich offer interest

rates significantly higher than the average to attract your money

The other advantage of '8s is that you have the option of receiving regular income

through the interest payments that are made every month or 7uarter This option is

especially useful for retirees

On the flip side,

A fi)ed deposit +on/t give you the same returns that you may get in the stoc- mar-ets

'or instance a stoc-9portfolio may raise 395 per cent in a good year +hereas a fi)ed

deposit typically earns only J90 per cent

A fi)ed deposit also doesn/t offer protection against inflation If inflation rises steeply

during the maturity of the '8 your inflation adjusted return +ill fall

4ay, for e)ample, the inflation +hen you deposited the money at a fi)ed return of K per

cent per annum is 5 per cent %o+ +hen your '8 matures say after 3 years, the

inflation increases to say E per cent

.I'1 I%4?RA%C1 PRO8?CT4

.ife insurance is a misunderstood concept in India (asically .ife Insurance Plans should

provide insurance cover to protect the dependants of the .ife Assured (ut conventionally .ife

Insurance policies have been sold as investment products +here the .ife Assured gets a lump

sum at the end of a fi)ed term or periodic returns on a regular basis during the term The

emphasis has been more on the investment aspects than on life cover The private players in

.ife Insurance sector in India they have brought in ne+er concepts li-e adding riders to life


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insurance policies but they also continue to sell insurance plans +ith more emphasis on the

investment features

Insurance is not for the person +ho passes a+ay, it for those +ho survive It is e)tremely

important that every person cover his ris-s so that his life, or in case of any eventuality, his

family, his lifestyle does not undergo any drastic change It is the responsibility of every

bread earner to guard against the events that could affect the family in the unfortunate

circumstance of his demise Thus, the need for proper insurance .ife insurance saving

schemes for government o+ned :#/e I'$ra'e C,rp,rat#,' ,/ I')#a a') ,ther pr#


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.ife insurance is absolutely critical for everyone irrespective of the amount of income you

currently earn, unless you have saved enough to ensure that your family can comfortably live

+ith the savings alone

#ret e'e/#t$ ,/ ta=#'( a :#/e I'$ra'e P&a'

Provides for .oss of Income 9 In case of the policy holder>s death, the dependents +ill suddenly

be left +ithout a constant source of income The future re7uirements of the dependent members

too +ould be hugely compromised +ith them having to settle for options +hich are not as good

as you +ould have +anted if you +ere around 6ith a good amount of life insurance cover you

can ensure that your family is not left high and dry along +ith emotional trauma of your

absence It is one of the most important reasons for ta-ing a life insurance policy

Protects your Assets 9 In your absence, your family should not have to resort to selling the assets

+hich you accumulated +ith your hard +or- In the event that there is no source of income your

family +ould have to sell assets li-e land, home, vehicle, je+ellery +hich you had so lovingly

purchased The comforts you +anted to provide to your family should not be ta-en a+ay from

them to ma-e do for their day9to9day living In case you are ade7uately ensured, all your loans

and your family>s financial future +ould be +ell ta-en care of

'inancial Planning 9 .ife insurance policies can also be ta-en for sound financial planningdepending on your re7uirements and ris- appetite 'or the conservative investors there are a host

of traditional policies li-e money bac- insurance policies and endo+ment plans to provide

income to you at regular intervals of time The more mar-et friendly investors can choose

?.IPs $?nit .in-ed Insurance Plans to plan their future There is a higher element of ris-

involved +ith ?.IPs but the gains too can potentially be on the higher side Ideally each

individual should assess their re7uirements and choose their investment options and time

hori*on

Ta) 4avings 9 One of the -ey reasons, people buy life insurance is to avail ta) benefits oney

paid as premium of .ife Insurance policies is e)empted from income ta) and the proceeds from

a life insurance policy on maturity also get ta) e)emption


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CHAPTER 4 RESEARCH ;ETHOO:OG

Nee) ,/ the St)+

#. Identification of Customers Preference +ith the survey on investment pattern, +e can

identify customer preference to+ards investment in different options

##. The study +ill be helpful for the companies +ho are involved in investment ban-ing to

adopt a proper mar-eting strategy

O?et#


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ata C,&&et#,'

The tas- of data collection begins after a research problem has been defined and research

designedB plan chal-ed out 8ata collection is to gather the data from the population The data

can be collected of t+o types Pr#ar+ )ata

Se,')ar+ )ata

Pr#ar+ )ata

The Primary data are those, +hich are collected afresh and for the first time, and thus happened

to be original in character

ethods of collection of Primary data are as follo+s

Intervie+

uestionnaire

Se,')ar+ )ata

The 4econdary data are those +hich have already been collected by someone else and +hich

have already been passed through the statistical tool

ethods of collection of 4econdary data are Hournals, 6ebsites and boo-s

ata C,&&et#,' Teh'#>e$

?sing available information

Observing

Intervie+ing $face9to9face

Administering +ritten 7uestionnaires

'ocus group discussions

#. !$#'( A


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Observation is a techni7ue that involves systematically selecting, +atching and recording

behavior and characteristics of living beings, objects or phenomena

###. I'tere$ $e)

Primary Tool

9 uestionnaire

9 Observations

4econdary Tool

9 4 1)cel

9 4P44

Re$earh Appat#,'

9 !R?4!A.96A..I4 T14

9 A%O#A

S,pe ,/ the $t)+

i This study helps in estimating the Investment pattern of the people

ii This study helps to -no+ about the response of the people regarding the investmentopportunities

:##tat#,'$ ,/ the $t)+


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In every research there are chances of errors and constraints 6e have found follo+ing

limitations in our study

i 4ample si*e, +hich +e have ta-en, is very small, on the basis of +hich efficient decision

can>t be ta-en

ii Respondents +ere biased in their responses because they +ere more in favour of the

pattern they +ere using

iii Co9operation from respondents, this +as the major problem

iv ost of the people +ere at their +or- 4o they did not have enough time to give all

replies

v The population surveyed +as not open to 7uestions related to their personal income ie

either they fell hesitant in disclosing the facts about their incomes or they +ere simply

not interested

vi The respondents +ere not in the favour to disclose their address and contact number

because they believed that they +ould be contacted through telemar-eting

vii Time factor

viii Cost factor

4.1 R!SA:-"A::IS TEST

The !rus-al96allis test evaluates +hether the population medians on a dependent variable are

the same across all levels of a factor To conduct the !rus-al96allis test, using the !

independent samples procedure, cases must have scores on an independent or grouping variable

and on a dependent variable The independent or grouping variable divides individuals into t+o

or more groups, and the dependent variable assesses individuals on at least an ordinal scale If

the independent variable has only t+o levels, no additional significance tests need to be

conducted beyond the !rus-al96allis test "o+ever, if a factor has more than t+o levels and

the overall test is significant, follo+9up tests are usually conducted These follo+9up tests most


23/46

fre7uently involve comparisons bet+een pairs of group medians 'or the !rus-al96allis, +e

could use the ann96hitney ? test to e)amine uni7ue pairs

ASS!;PTIONS !NER:ING A ;ANN-"HITNE ! TEST

Assumption 0 The continuous distributions for the test variable are e)actly the same $e)cept

their medians for the different populations

Assumption 3 The cases represent random samples from the populations, and the scores on the

test variable are independent of each other

Assumption 5 The chi9s7uare statistic for the !rus-al96allis test is only appro)imate and

becomes more accurate +ith larger sample si*es

The p value for the chi9s7uare appro)imation test is fairly accurate if the number of cases

is greater than or e7ual to 5

Chi9s7uare is a statistical test commonly used to compare observed data +ith data +e +ould

e)pect to obtain according to a specific hypothesis 'or e)ample, if, according to endel/s la+s,

you e)pected 0 of 3 offspring from a cross to be male and the actual observed number +as K

males, then you might +ant to -no+ about the ;goodness to fit; bet+een the observed and

e)pected 6ere the deviations $differences bet+een observed and e)pected the result of chance,

or +ere they due to other factors "o+ much deviation can occur before you, the investigator,

must conclude that something other than chance is at +or-, causing the observed to differ from

the e)pected The chi9s7uare test is al+ays testing +hat scientists call the '&&

h+p,the$#$F +hich states that there is no significant difference bet+een the e)pected and

observed result The formula for calculating chi9s7uare $ 3 is

3Q (o-e)3/e

That is, chi9s7uare is the sum of the s7uared difference bet+een observed $o and the e)pected

$e data $or the deviation, d, divided by the e)pected data in all possible categories


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4.2 ANA:SIS O ARIANCEANOAB

In statistics, analysis of variance $A%O#A is a collection ofstatistical models, and their

associated procedures, in +hich the observed variancein a particular variable is partitioned into

components attributable to different sources of variation In its simplest form, A%O#A provides

a statistical testof +hether or not the meansof several groups are all e7ual, and therefore

generali*es t9testto more than t+o groups 8oing multiple t+o9sample t9tests +ould result in an

increased chance of committing a type I error 'or this reason, A%O#As are useful in

comparing t+o, three, or more means

There are several types of A%O#A any statisticians base A%O#A on the design of the

e)periment, especially on the protocol that specifies the random assignmentof treatments to

subjects2 the protocol/s description of the assignment mechanism should include a specification

of the structure of the treatments and of anybloc-ingIt is also common to apply A%O#A to

observational data using an appropriate statistical model

4ome popular designs use the follo+ing types of A%O#A

One9+ay A%O#A is used to test for differences among t+o or more independentgroups

$means,eg different levels of urea application in a crop Typically, ho+ever, the one9+ay

A%O#A is used to test for differences among at least three groups, since the t+o9group case

can be covered by at9testS36hen there are only t+o means to compare, thet9testand the

A%O#A '9testare e7uivalent2 the relation bet+een A%O#A and tis given byFQ t3

'actorialA%O#A is used +hen the e)perimenter +ants to study the interaction effects

among the treatments

Repeated measuresA%O#A is used +hen the same subjects are used for each treatment

$eg, in a longitudinal study

ultivariate analysis of variance$A%O#A is used +hen there is more than

one response variable
http://en.wikipedia.org/wiki/Statisticshttp://en.wikipedia.org/wiki/Statistical_modelhttp://en.wikipedia.org/wiki/Variancehttp://en.wikipedia.org/wiki/Statistical_testhttp://en.wikipedia.org/wiki/Meanhttp://en.wikipedia.org/wiki/Student's_t-test#Independent_two-sample_t-testhttp://en.wikipedia.org/wiki/Student's_t-test#Independent_two-sample_t-testhttp://en.wikipedia.org/wiki/Type_I_errorhttp://en.wikipedia.org/wiki/Experimental_designhttp://en.wikipedia.org/wiki/Experimental_designhttp://en.wikipedia.org/wiki/Random_assignmenthttp://en.wikipedia.org/wiki/Blocking_(statistics)http://en.wikipedia.org/wiki/One-way_ANOVAhttp://en.wikipedia.org/wiki/Statistical_independencehttp://en.wikipedia.org/wiki/T-testhttp://en.wikipedia.org/wiki/Analysis_of_variance#cite_note-21http://en.wikipedia.org/wiki/Analysis_of_variance#cite_note-21http://en.wikipedia.org/wiki/Analysis_of_variance#cite_note-21http://en.wikipedia.org/wiki/T-testhttp://en.wikipedia.org/wiki/F-testhttp://en.wikipedia.org/wiki/Factorial_experimenthttp://en.wikipedia.org/wiki/Repeated_measureshttp://en.wikipedia.org/wiki/Longitudinal_studyhttp://en.wikipedia.org/wiki/Multivariate_analysis_of_variancehttp://en.wikipedia.org/wiki/Dependent_variablehttp://en.wikipedia.org/wiki/Statisticshttp://en.wikipedia.org/wiki/Statistical_modelhttp://en.wikipedia.org/wiki/Variancehttp://en.wikipedia.org/wiki/Statistical_testhttp://en.wikipedia.org/wiki/Meanhttp://en.wikipedia.org/wiki/Student's_t-test#Independent_two-sample_t-testhttp://en.wikipedia.org/wiki/Type_I_errorhttp://en.wikipedia.org/wiki/Experimental_designhttp://en.wikipedia.org/wiki/Experimental_designhttp://en.wikipedia.org/wiki/Random_assignmenthttp://en.wikipedia.org/wiki/Blocking_(statistics)http://en.wikipedia.org/wiki/One-way_ANOVAhttp://en.wikipedia.org/wiki/Statistical_independencehttp://en.wikipedia.org/wiki/T-testhttp://en.wikipedia.org/wiki/Analysis_of_variance#cite_note-21http://en.wikipedia.org/wiki/T-testhttp://en.wikipedia.org/wiki/F-testhttp://en.wikipedia.org/wiki/Factorial_experimenthttp://en.wikipedia.org/wiki/Repeated_measureshttp://en.wikipedia.org/wiki/Longitudinal_studyhttp://en.wikipedia.org/wiki/Multivariate_analysis_of_variancehttp://en.wikipedia.org/wiki/Dependent_variable


25/46

CHAPTER-5 ANA:SIS AN INERPRETATION

r$=a&-"a&$ te$t

8ifferent age group of respondents are influencing in ta) planning

#')#'($1

"$ 0 %o significant difference in ran-ing belonging to different age of respondents for the

factor influencing ta) planning

"$0 0 4ignificant difference in ran-ing belonging to different age of respondents for the factor

influencing ta) planning

Table $0


26/46

Age % ean Ran- Chi947uare df Asymp 4ig

Increase

Income

395 years 0 30EE F0F@ 5 0@

59@ years 3 0JF3

@9E years 0 3J0

Above E years 3 53

"igher Ta)

395 years 0 0KEE

59@ years 3 35M3 3J 5 @@

@9E years 0 0KEE

Above E years 3 3FJE

Problems

ta)

395 years 0 0K@

59@ years 3 3M

@9E years 0 3EJE 305M 5 E@@

Above E years 3 30JE

Income

'amily

395 years 0 0EJE

59@ years 3 3FK

@9E years 0 3E3

Above E years 3 @ K@@ 5 5K

I'terpretat#,'

'rom table $0, !rus-al96allis>s "9test sho+s that of the four variables +ith respect to ta)

planning are rated by respondents belonging to different age groups in order so as to understand

that +hether any difference in influencing the respondents across different age e)ists +ith

regards to their preference Ta) Planning Assessment Thus out of four variables, one variables

is found to have significant impact ie Income 'amily $"Q5K, p E +ere found to be

significantly related +ith the Age groups Thus, +e accept the null "ypotheses for these three

variables and reject the null "ypothesis for remaining one variable that is Income of the 'amily

selected for study

8ifferent 1ducation of respondents are influencing in ta) planning

#')#'($


27/46

"$ 3 There is no significant difference in ratings of the respondents belonging to different

educational bac-grounds for the factors that influence ta) planning

"$0 3 There is significant difference in ratings of the respondents belonging to different

educational bac-grounds for the factors that influence ta) planning

Table $3

1ducation % ean Ran- Chi-Square d As!m". Si#.

IncreaseUIncome

?ndergraduate K 0E

$.%&$ & '.'()Draduate 33 35

Post Draduate 03 3K@

"igherUTa)

?ndergraduate K 0EEF

&.))* & '.&($Draduate 33 35E

Post Draduate 03 30JM

ProblemsUta)

?ndergraduate K 0M

+.%%, & '.%*Draduate 33 35F0

Post Draduate 03 0M3M

IncomeU'amily

?ndergraduate K 305K

&.(+* & '.(+Draduate 33 35K

Post Draduate 03 0J5K

Total @3

I'terpretat#,'


planning are rated by respondents belonging to different education groups in order so as to

understand that +hether any difference in influencing the respondents across different educatione)ists +ith regards to their preference Ta) Planning Assessment Thus out of four variables, one

variables is found to have significant impact ie Increase Income $"Q5K, p E +ere

found to be significantly related +ith the education groups Thus, +e accept the null

"ypotheses for these three variables and reject the null "ypothesis for remaining one variable

that is Increase Income selected for study


28/46

. 8ifferent Occupation of respondents are influencing in ta) planning

#')#'($

"$ 5 There is no significant difference in ratings of the respondents belonging to differentoccupations for the factors that influence ta) planning

"$0 5 There is significant difference in ratings of the respondents belonging to different

occupations for the factors that influence ta) planning

Table $5


29/46

Occupation % ean Ran- Chi-Square d As!m". Si#.

IncreaseUIncome 4alaried 3E 0FF3 ++.+() ( '.'++

Professional J 3J3M

(usiness K 3MF

Retired 3 53

"igherUTa) 4alaried 3E 330

Professional J 300@ +.'&+ ( '.,*$

(usiness K 0KF3

Retired 3 3FJE

ProblemsUta) 4alaried 3E 30EF

Professional J 0KEJ

(usiness K 35K0 '.,,$ ( '.)%%

Retired 3 30JE

IncomeU'amily 4alaried 3E 333@

Professional J 0JF@

(usiness K 0JM@

Retired 3 @ $.%% ( '.'))

Total @3

I'terpretat#,'


planning are rated by respondents belonging to different occupation groups in order so as to

understand that +hether any difference in influencing the respondents across different

occupation e)ists +ith regards to their preference Ta) Planning Assessment Thus out of four


30/46

variables, one variables is found to have significant impact ie Increase Income $"Q00, p

E +ere found to be significantly related +ith the occupation groups Thus, +e accept the

null "ypotheses for these three variables and reject the null "ypothesis for remaining one

variable that is Increase Income selected for study

ANOA Te$t

#')#'($

"$ @ There is no significant difference in ratings of the respondents in selecting a particular

ta) saving scheme +ith respect to their investment parameters

"$0 @ There is significant difference in ratings of the respondents in selecting a particular ta)

saving scheme +ith respect to their investment parameters


31/46


32/46

Ta?&e 5B ;&t#p&e C,par#$,'$

(onferroni

8ependent

#ariable

$I

Ta)UOptions

$H

Ta)UOptions

ean

8ifference

$I9H

4td

1rror 4ig

MEN Confidence

Interval

.o+er

(ound

?pper

(ound

"ID"UR1T?R% .IC PP' 90FFJ @M0K3 0 90@K@M 0@E0E

%4C 9KE FJ003 0 93KE5E 00E5E

(onds 9FK555 EJ5@ 0 935KF 00M5

Others 0MK555 JEKF5 03M 93K0@ @3@K

PP' .IC 0FFJ @M0K3 0 90@E0E 0@K@M

%4C 9K5555 J5F50 0 9550@ 05F@J

(onds 9FFFFJ F@EJM 0 93EM@E 03F03

Others 3 K0FKF 0M3 9@5KE @@5KE

%4C .IC KE FJ003 0 900E5E 3KE5E

PP' K5555 J5F50 0 905F@J 550@

(onds 0FFFJ JMM5 0 930M@@ 3E3JK

Others 3K5555W M5EK@ @E 5MF EF3J

(onds .IC FK555 EJ5@ 0 900M5 35KF

PP' FFFFJ F@EJM 0 903F03 3EM@E

%4C 90FFFJ JMM5 0 93E3JK 30M@@

Others 3FFFFJW KFF@3 5M K3 E3E50

Others .IC 90MK555 JEKF5 03M 9@3@K 3K0@

PP' 93 K0FKF 0M3 9@@5KE @5KE

%4C 93K5555W M5EK@ @E 9EF3J 95MF

(onds 93FFFFJW KFF@3 5M 9E3E50 9K3

W The mean difference is significant at the E level

I'terpretat#,'


33/46

'rom Table $@, it is found that the p value for "igher Returns is lesser than E and for the

remaining investment parameters the p value is greater than E This means that +e reject the

null hypotheses +ith respect to investment parameter of higher returns and accept the null

hypotheses for the remaining investment variables

Table $E sho+s that +hich ta) saving schemes e)hibit those differences and it has been found

that both %4C and (onds are significantly different than others options of those schemes +ith

respect to higher returns This sho+s that investors have different perceptions +hile selecting

ta) saving schemes +hen higher returns are considered Therefore +e reject the null hypotheses

and accept the alternative hypotheses that there is no significant difference in ratings of the

respondents in selecting a particular ta) saving scheme +ith respect to the investment

parameters of higher return and accept the null hypotheses for the remaining investment

parameters

A%O#A Age

#')#'($

"$ F There is no significant difference in ratings of the respondents belonging to different age

for the factors that influence in ta) planning

"$0 F There is significant difference in ratings of the respondents belonging to different agefor the factors that influence in ta) planning


34/46

Ta?&e 6B ANOA

4um of

47uares df

ean

47uare ' 4ig

TAVU(1%1'IT (et+een

Droups3KEE 5 ME3 E5M FEK

6ithin Droups FJE 5K 0JF@

Total FMME @0

"ID"UR1T?R% (et+een

DroupsK@JF 5 3K3E 0FFE 0M0

6ithin Droups F@E 5K 0FMJ

Total J3MJF @0

4A'1T: (et+een

Droups3@KF 5 K3M @0E J@5

6ithin Droups JEK 5K 0MME

Total JK3KF @0

.I?I8IT: (et+een

Droups0@K5 5 @M@ 3KE K5F

6ithin Droups FEKE 5K 0J55

Total FJ555 @0

RI4! (et+een

DroupsMJE 5 535E 55E 3M

6ithin Droups 5FJ 5K MFF

Total @F@E @0

R1D?.ARIT:UI%CO1 (et+een

DroupsF@3F 5 30@3 JM@ EE

6ithin Droups 03EE 5K 3FMM

Total 0KMJF @0


35/46

Ta?&e 7B;&t#p&e C,par#$,'$

(onferroni

8ependent

#ariable $I Age $H Age

ean

8ifferenc

e $I9H

4td

1rror 4ig

MEN Confidence

Interval

.o+er

(ound

?pper

(ound

RI4! 395 years 59@

years5 5KF3 0 9JEM@ 05EM@

@9E

years@ @5ME 0 9K355 0F355

Above E

years90M JF035 03 9@0KM 30KM

59@ years 395years

95 5KF3 0 905EM@ JEM@

@9E

years0 5KF3 0 9MEM@ 00EM@

Above E

years933W J3KK3 3J 9@33KJ 90J05

@9E years 395

years9@ @5ME 0 90F355 K355

59@

years 90 5KF3 0 900EM@ MEM@

Above E

years935W JF035 3J 9@@0KM 90K00

Above E

years

395

years0M JF035 03 930KM @0KM

59@

years33W J3KK3 3J 0J05 @33KJ

@9E

years35W JF035 3J 0K00 @@0KM

I'terpretat#,'


36/46

'rom Table $F, it is found that the p value for Ris- is lesser than E and for the remaining

investment parameters the p value is greater than E This means that +e reject the null

hypotheses +ith respect to investment parameter of ris- and accept the null hypotheses for the

remaining investment variables

Table $J sho+s that +hich age groups e)hibit those differences and it has been found that age

group @9E and E above are significantly different than others options of age group +ith

respect to ris-s This sho+s that investors have different perceptions +hile selecting ta) saving

schemes +hen ris- is considered Therefore +e reject the null hypotheses and accept the

alternative hypotheses that there is no significant difference in ratings of the respondents in

selecting a particular ta) saving scheme +ith respect to the investment parameters of ris- and

accept the null hypotheses for the remaining investment parameters

A%O#A 1ducation

#')#'($

"$ K There is significant difference in ratings of the respondents belonging to different

education for the factors that influence in ta) planning

"$0 K There is no significant difference in ratings of the respondents belonging to different agefor the factors that influence in ta) planning


37/46

Ta?&e 8B ANOA

4um of

47uares df

ean

47uare ' 4ig

TAVU(1%1'IT (et+een

Droups 03ME 3 F@J 5FK FM@

6ithin Droups FKF0 5M 0JEM

Total FMME @0

"ID"UR1T?R% (et+een

Droups50E 3 0EE3 KFJ @3K

6ithin Droups FMKJ0 5M 0JM3

Total J3MJF @0

4A'1T: (et+een

Droups FJM 3 55ME 0KE3 0J

6ithin Droups J0@MF 5M 0K55

Total JK3KF @0

.I?I8IT: (et+een

DroupsEME 3 3MJ 0J@ K@0

6ithin Droups FFJ5M 5M 0J00

Total FJ555 @0

RI4! (et+een

Droups @M 3 3@ 0J5 K@3

6ithin Droups @EMMF 5M 00JM

Total @F@E @0


DroupsEJ5 3 3KE3 0JJ 5E0

6ithin Droups 053J5 5M 3F@K

Total 0KMJF @0

I'terpretat#,'

A%O#A Occupation

#')#'($


38/46

"$ M There is no significant difference in ratings of the respondents belonging to different

occupation for the factors that influence in ta) planning

"$0 M There is significant difference in ratings of the respondents belonging to different

occupation for the factors that influence in ta) planning

Ta?&e 9B ANOA

4um of

47uares df

ean

47uare ' 4ig

TAVU(1%1'IT (et+een

DroupsJ 5 35 05 MMK

6ithin Droups FMK5E 5K 0K5K

Total FMME @0

"ID"UR1T?R% (et+een

DroupsJK55 5 3F00 0E35 33@

6ithin Droups FE0@@ 5K 0J0@

Total J3MJF @0

4A'1T: (et+een

DroupsF30J 5 3J3 0M5 5F@

6ithin Droups J3FM 5K 0KMJ

Total JK3KF @0

.I?I8IT: (et+een

Droups5FE 5 033 FM MJF

6ithin Droups FFMFM 5K 0JF3

Total FJ555 @0

RI4! (et+een

DroupsMJ55 5 53@@ 55F3 3M

6ithin Droups 5FFJ3 5K MFE

Total @F@E @0


DroupsJM@J 5 3F@M MMF @E

6ithin Droups 003M 5K 3FEM

Total 0KMJF @0


39/46

Ta?&e 10B ;&t#p&e C,par#$,'$

(onferroni

8ependent

#ariable

$I

Occupation

$H

Occupation

ean

8ifference

$I9H

4td

1rror 4ig

MEN Confidence

Interval

.o+er

(ound

?pper

(ound

RI4! 4alaried Professional 0JJ0@ @3K 0 9MM30 05@F@

(usiness 95E 5MM@ 0 90@0EJ KEJ

Retired 930KW J30KM 3J 9@0KM@ 90JF

Professional 4alaried 90JJ0@ @3K 0 905@F@ MM30

(usiness 9@K30@ EK@5 0 90KMJ5 M55

Retired 935EJ0@W JKJFE 3M 9@E@ME 90F@J

(usiness 4alaried 5E 5MM@ 0 9KEJ 0@0EJ

Professional @K30@ EK@5 0 9M55 0KMJ5

Retired 90KJE JJFF5 03@ 9@5FJ 3KFJ

Retired 4alaried 30KW J30KM 3J 0JF @0KM@

Professional 35EJ0@W JKJFE 3M 0F@J @E@ME

(usiness 0KJE JJFF5 03@ 93KFJ @5FJ

W The mean difference is significant at the E level

I'terpretat#,''rom Table $M, it is found that the p value for Ris- is lesser than E and for the remaining

investment parameters the p value is greater than E This means that +e reject the null

hypotheses +ith respect to investment parameter of ris- and accept the null hypotheses for the

remaining investment variables

Table $0 sho+s that +hich occupation e)hibit those differences and it has been found that

professional retired above are significantly different than others options of occupation +ith

respect to ris-s This sho+s that investors have different perceptions +hile selecting ta) saving

schemes +hen ris- is considered Therefore +e reject the null hypotheses and accept the

alternative hypotheses that there is no significant difference in ratings of the respondents in

selecting a particular ta) saving scheme +ith respect to the investment parameters of ris- and

accept the null hypotheses for the remaining investment parameters


40/46

CHAPTER 6 ININGS

'rom the analysis made in the previous chapter the follo+ing findings can be derived

ainly males & young people bet+een the age group 39@ have invested in investment

avenues

ainly young graduates have invested in investment avenues (ut in real mar-et this

doesn>t stand true

ainly businessmen and private sector employees invest in investment avenues

ost of the people +ho have invested investment avenues are in the income group of

Rs@90 la-h

ost of the investors had invested bet+een Rs 395 la-hs in, investment avenues


41/46

ostly people invest for a safe retirement follo+ed by children>s marriage and

education

Investors mainly invest for +ealth creation and to earn returns

ost of the investors consider safety before investing

ost of the investors have invested bet+een 395N of their savings in investment

avenues

ost of the respondents are ready to ta-e average ris-

ost of the investors trading in investment avenues prefer short9term period

ost of the investors got to -no+ about investment avenues through edia

CHAPTER 7 RECO;ENATATIONS

Investors should ma-e the investment +ith proper planning -eeping in mind their

investment objectives

Investors should read the offer document carefully before investing in any scheme of the

mutual funds and life insurance

Investors should also consults the bro-ers or agents to see- information and advice but

their decision should not merely be based on agents advice rather the decision should be

based on their careful investigation


42/46

The investors should select a particular investment option on basis of their need and ris-

tolerance

The investors should diversify their investment portfolio in order to reduce the ris-

The investors should continuously monitor their investments

The companies should provide all relevant information to the investors

If the minimum investment is reduced, this might induce more people to invest

It is not a necessity that one must be very educated to invest in investment avenues 4o,

it is recommended that those +ho are not so +ell educated also can invest in investment

avenues

XX J 4T1P4 TO (1TT1R I%#14T1%T P.A%%I%DXX

Here are $,e $tep$ +, a' /,&&,* t, ?etter +,r #'


43/46

Step 3 Sa


44/46

There isn/t just one strategy that can be used to invest successfully

1ach investment vehicle has its o+n uni7ue characteristics

8iversifying investments in a portfolio helps to manage ri

ANNE@!RES

e$t#,''a#re

at,r$ I'/&e'#'( I'


45/46

+ Insurance Policy

& Provident 'und 4cheme

( %ational 4avings Certificates

Infrastructure (onds

% Other Ta)94aving 4chemes

3 !indly ran- the follo+ing statements as per your preference, 0 .east Preferred and F ost

Preferred

N, Part#&ar$ :IC PP NSC ,')$ Other ta% $a


46/46

5 !indly ran- the follo+ing statements that influences the Assessees for ta) planning, 0

.east Important and E ost Important

4B Per$,'a& eta#&$

Ge')er 0 ale 3 'emale

A(e 0 3 5 years 3 5 @ years 5 @ E years

@ Above E years

E)at#,' 0 ?ndergraduate 3 Draduate 5 Post Draduate

Opat#,' 04alaried 3 Professionals 5 (usiness

@ Retired

N, Part#&ar$ 1 2 3 4 5

0 Increasing Income

3 "igh Income Ta) Rate

5 Problems in Ta) Payment

@ Increasing Income of 'amily embers

factors influcing investment in tax saving scheme word final1

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