Name: Ankush Jain, Sandeep Kumar
Country: India

Year: 2025
Volume: Volume-12, Issue-1 (Jan-June)
Page Number: 89-96
DOI: https://doi.org/10.5281/zenodo.15761025

This study investigates the level of awareness among individual taxpayers regarding various tax-saving instruments available under the Indian Income Tax Act, 1961. With tax planning becoming increasingly important in personal financial management, understanding taxpayers’ knowledge can inform policymakers and financial educators. A structured questionnaire was administered to a sample of 400 individual assessees across urban and rural areas of Gujarat, covering demographics, awareness of provisions such as Section 80C (PPF, ELSS, NSC, LIC), Section 80D (health insurance), Section 80E (education loan), Section 80G (donations), and Section 80EEA (housing loan interest). Statistical analysis—including descriptive statistics, awareness index scoring, and inferential tests—reveals substantial variation in awareness levels. While 85% of respondents are familiar with mainstream instruments like PPF and LIC premiums, awareness significantly drops below 50% for categories such as ELSS equity funds, Section 80EEA benefits, and charitable donation deductions. Demographic factors such as age, education level, and income significantly influence awareness scores (p < 0.05). Urban respondents consistently outperform rural respondents, indicating persistent geographic inequality in financial literacy. Regression analysis shows education level (β = 0.37, p < .01) and financial advisory access (β = 0.29, p < .05) as strong predictors of awareness. The study concludes by recommending targeted awareness campaigns, simplifying messaging by financial institutions, and incorporating tax-planning modules into financial education curricula. These measures aim to enhance equitable and strategic tax utilization, thereby improving financial wellbeing and voluntary compliance.
Keywords: Tax-saving instruments, financial awareness, Income Tax Act, individual taxpayers, financial literacy.