KIRAN METAL FINISHERS

CHAPTER-1
INTRODUCTION
1.1 INTRODUCTION, INDUSTRY PROFILE AND COMPANY PROFILE

INTRODUCTION
Finance is a system that involves the exchange of funds between the
borrowers and the lenders and investors. It operates at various levels from farms to global to
national levels. Thus, there are many complexities involved in it related to markets,
institutions, extra .on introduction to finance will provide a basic idea how the finance sector
in general works in India.

INDUSTRY PROFILE
An industry is a sector that produces goods or related services within
an economy. When a large corporate group has multiple sources of revenue generation, it is
considered to be working in different industries.
MEANING
The Metal Industry is primarily concerned with metallurgy and
metalworking. The procedure which involves the manufacturing of machines and other
useful items from the metals so obtained through the metallurgical processes, constitute
metalworking.
BENEFITS
The metal industry’s significance for our prosperity and welfare cannot be
emphasized enough. The metal industry’s products also play a crucial role in the
development of the sustainable society (one that ensures the health and vitality of human life
and nature). Competitive metal companies generates employment, export earnings, tax
revenues and innovations.
COMPANY PROFILE
It started in the year 28-03-1996, but Registered in 2008, Kiran
metal finishers has gained immense expertise in offering electroplating services on
components, shafts etc. kiran metal finishers located in Bengaluru, Karnataka and providing
electroplating services of nickel chrome, nickel plating and zinc plating services on
components, shafts to the clients.
Table no 1.1 showing about the company
Company Name Kiran metal finishers
Company address A-370 / 2,1st stage , Peenya Industrial Estate ,
Bangalore-560058
Website kiranmetal@yahoo.com
Incorporation 1996
Class of company Private

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Company status Active

Activity Fabrication

1.1.1 PROMOTERS

Table No. 1.2 showing the promoters of the company

MR. SHASHI REDDY CHAIRMAN
MR. LAKSHMI KANTH MANAGER
MR. KIRAN HEAD OF MANUFACTURING
DEPARMENT

1.1.2 VISION, MISSION AND QUALITY POLICY

VISION
Kiran metal finishers vision is to participate consistently in extending their
generation limits and expanding their production capacities with a specific end goal to
meet the epidemically developing worldwide demand and therefore hold their position at
the front of the metal business.

MISSION
Kiran metal finishers mission is to be deliver and supply the most noteworthy
quality products to their clients utilizing sustainable procedure that meet the most
elevated global standards of environment control. They trust that profoundly talented and
motivated employees are the way to accomplishing their goals and they will keep on
providing outstanding training and investment in their future.

QUALITY POLICY
Quality is maintained throughout – from order entry to delivery
and extending to customer services follow-up. Quality inspection procedure have been
developed for each operation and numerous process controls are in place. Corrective and
follow-up actions can be undertaken immediately.

1.1.3 PRODUCT AND SERVICE PROFILE

PRODUCT PROFILE

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Digressing G & W Chemical

Rinse Stationary water
Pickling G & W Chemical 30% & 70% water
Rinse Stationary water
Chemical Dip G & W Chemical 500ml
Rinse Stationary water
Nickel Plating Vat process
Rinse DM water
Drying Oven
Inspection Visual
Curing Open ai
Dispatch Sealing

SERVICE PROFILE
 Own terminals with warehouse
 Specialized charting team
 Lashings and hot work
 Land transport
 Train connections
 Last mile deliveries
 Protecting

1.1.4 AREAS OF OPERATION

It is one of the finest fabrication metal industry that is widely
connected through various manufacturing industries that provides medium support of
fabricating metal as per the industries requirement. We have connections among various
industries situated in various states. Such as Chennai, Kolkata, Kerala, Mumbai, ect.

1.1.5 INFRASTRUCTURE FACILITIES

The material to be nickel plated is thoroughly
cleaned before plating to remove particulates and grease by using decreasing chemical.
After rinsing, de-rusting is carried out using de-rusting chemical. The cleansed material is
then nickel plated to protect the base material from corrosion. Then the final product is
rinsed and dried to dispatch.

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1.1.6 COMPETITORS INFORMATION

Major competitors of kiran metal finishers are as follows
 CHOWDESHWARI METAL ENTERPRISES
 SHIVA METAL FABRICATORS
 SMT ENTERPRISES
 MEENAKSHI METAL ENTERPRISES

1.1.7 SWOT ANALYSIS

Strengths:
1. Strong raw material supply chain management.
2. Operations are efficient and high tech.
3. A leader in both process and product technology.
4. Annual raw steelmaking capability of nearly a million net tons.
5. The company’s customer focus is intense.

Weaknesses:
1. Kiran metal and its end-product markets continue to be impacted by challenging
economic conditions.
2. Increased imports of steel products into other countries shows inability to cater to
demand.
3. Government and political intervention affects operational efficiency.
4. Higher profit margins are not allowed.

Opportunities:
1. Exploit opportunities related to the availability of reasonably priced natural gas as an
alternative to coke in the iron reduction process to improve cost competitiveness.
2. The increased and ongoing development of shale resources presents an opportunity
to increase tubular product sales.
3. The completion of the ERP project will provide opportunities to streamline,
standardize and centralize business processes in order to maximize cost
effectiveness, efficiency and control across global operations.

Threats:
1. Kiran metal may face increased risks of customer and supplier defaults.
2. Rapidly growing supply in China may result in additional excess worldwide capacity
and falling steel prices.
3. Steel consumption is highly cyclical which may have an adverse effect on
profitability and cash flow.

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1.1.8 FUTURE GROWTH AND PROSPECTS

One-Year Price Performance

Metal Produ cts - Procuremen t and Fab rication Ind ustry’s Valu ation
On the basis of forward 12-month EV/EBITDA ratio, which is a commonly used
multiple for valuing Metal Products - Procurement and Fabrication companies, we
see that the industry is currently trading at 7.5 compared with the S&P 500’s 12.7
and the Industrial Products sector’s trailing 12-month EV/EBITDA of 17.8. This is
shown in the charts below.
 

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E nterpris e Valu e/EBITDA (EV/EBITD A) F12M Ratio

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1.1.9 FINANCIAL STATEMENT

TRADING, PROFIT & LOSS, PROFIT & LOSS A/C OF KIRAN METAL FINISHERS

As on 31st As on 31st As on 31st As on 31st

PARTICULARS March March March March
  2014-15 2015-16 2016-17 2017-18
  Rs. Rs. Rs. Rs.
Opening Stock 5377874 3025621 3785870 6157362
Purchases 30245722 23662635 21769585 14170172
Direct Expenses 976057 580624 585832 176057
         
Total 36599653 27268880 26141287 20503591
         
Sales 35682891 24958029 21990638 17065543
Closing Stock 3025621 3785870 5450297 5485913
         
Total 38708512 28743899 27440935 22551456
         
Gross Profit or Gross C/F 2108859 1475019 1299648 2047865
         
Administrative Expenses 589163 528316 526515 528946
Selling Expenses 79442 11187 0 8
Finance Charges 5732 3952 3531 11316
Depreciation 122411 84202 71464 77743
Total 796748 627657 601510 618013
Indirect Incomes 145141 750156 699506 220190
Net Profit/Loss C/F 1457252 1597518 1397644 1650042
         
Net Profit/Loss B/F 1457252 1597518 1397644 1650042
Interest to Partners 1100821 1249710 1146058 1124135
Salary to Partners 303859 298685 226427 405544
Inadmissible Expenses        
To GST Late Fees 0 0 0 200
To Interest Pain on Late payment
of income tax 0 0 0 275
Income Tax 17651 17586 26011 38403
To Donations 20000 50001 0 0
To Vat Penalty 2000 45 5000 0

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To IT Written Off 8085 0 0 0

Total 1452416 1616027 1403496 1568557
         
Net Profit/Loss Transferred to
C/A 4836 -18509 -5852 81485
BALANCE SHEET OF KIRAN METAL FINISHERS FOR THE YEAR 2014-2015, 2015-

2016, 2016-2017, 2017-2018.

SL. As on 31st As on 31st As on 31st As on 31st

No. Particulars March March March March
    2014-15 2015-16 2016-17 2017-18
    Rs. Rs. Rs. Rs.
  Capital And Liabilities        
1 Capital        
  Partners’ capital 10414251 10800136 8228175 9946358
Current liabilities &
2 provisions        
  Statutory Dues 228730 156597 50089 0
  Sundry Creditors 6376275 1764761 3842517 1208454
  Provisions 47427 17586 26011 13403
GST Collected &
  Payable 0 0 0 38831
           
  Total 17066683 12739080 12146792 11207046
           
1 Properties and Assets        
2 Fixed Assets 776982 554749 483285 595623
Current Assets, Loans &
  Advances        
  Closing Stock 3025621 3785870 5450297 5485913
  Sundry Debtors 12168981 6846456 4760243 4296207
  Cash 44289 517283 775409 541320
  Bank A/C 956435 801316 444152 192608
  Deposits 94375 95375 95375 95375
  Loans & Advances 0 138031 138031 0
           
  Total 17066683 12739080 12146792 11207046

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2.1 CONSCEPTUAL BACKGROUND AND LITERATURE REVIEW

2.1.1 THEOETICAL BACKGROUND

Salary Concept and Definition   normally, the term ‘Salary’ signifies the consideration for
services rendered by a person. The person who renders the services is called the ‘employee’
while the person who receives the services and pays the consideration is called the ‘employer’.
The expression ‘employment’ means existence of relationship of master and servant between the
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employer and the employee. This relationship is governed by a contract of employment whether
expressed or implied which is absolutely essential in order to tax the amount so received under
the head ‘Income from Salaries’. Thus, a medical practitioner, an advocate or a chartered
accountant not employed by the employer but appointed as a consultant or a retainer cannot be
called an employee and the amount so received by such persons will not be taxable under the
head ‘Salaries’. Further, where such persons are appointed in a regular job under a contract,
verbal or written or implied, then they constitute employees and their remuneration is taxable
under the head ‘Salaries’.     Sec 17 of the Income Tax Act, 1961, gives an inclusive definition of
salary. Broadly, it includes:  
a)      Basic Salary;
b)      Fees, Commission and Bonus;
c)      Taxable portion of cash allowances;
d)      Taxable value of Perquisites;
e)      Retirement Benefits etc.  

Although all the components of salary income are included in salary, there are certain incomes
in each of these categories which are either fully exempt or exempt upto a certain limit. The
aggregate of all the above incomes, after the exemption(s) available, if any, is known as ‘Gross
Salary’. From the ‘Gross Salary’, the following deductions are allowed u/s 16 of the Act to arrive
at the figure of ‘Net Salary’.
a)      Deduction for entertainment allowance u/s 16
b)      Deduction on account of any sum paid towards tax on employment u/s 16(iii).
Tax Planning  
Broadly speaking, tax planning is not a one day show; rather it is a gradual arrangement of one’s
financial affairs in such a way that there are no violations of the legal provisions of the Income
Tax Act. Though, it is a legal obligation of every citizen to pay the taxes honestly under the law,
the taxpayer is legitimately entitled to plan his taxes in such a manner that his tax liability is
reduced to a minimum. Tax planning is needed for:
a)      Minimizing litigation between the taxpayer and the tax administrators;
b)      Healthy growth of economy; and
c)      Employment generation.
  Concepts used in Tax Planning
Tax evasion
Tax avoidance

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Tax planning
Tax management

2.1.2 LITERATURE REVIEW

 Gaba (1995) in his doctoral thesis studied the extent and technoeconomic viability of
computer usage and adoption of Management Information System in Income Tax
Department in India. He also studied the extent of human resistance to introduction of
computerization in India. The methodology of the research had been partially analytical
based on historical as well as primary data collected from employees. Apart from this,
discussions with concerned officers of Income Tax Department were also held. The study
highlighted that introduction of computers was a welcome change which would improve
the revenue of the Income Tax Department and ensure better service. The researcher also
pinpointed out the lack of adoption of any systematic plan for computerization by the
department. While concluding, he suggested that department should specify the work to
be done by computers in order to ensure economy and success of the project.
 Mishra (1996) attempted to study the role of Income Tax in overall tax framework in
terms of its coverage, contribution to tax revenue and administration of the tax. She
collected secondary data from RBI Publications, Planning Commission publications,
reports of Comptroller and Auditor General of India from 1960-61 to 1993-94. An
analysis of revenue contribution and coverage of corporate income tax showed an
increasing contribution in absolute terms. The study revealed that income tax had a low
tax base, which failed to increase over years because of a number of exemptions,
deductions, allowances as well as tax avoidance and evasion practices. The study also
revealed that income tax administration was ill informed, ill equipped and overburdened
with cases of arrears, refunds, revisions, appeals etc. It was also pointed out that income
tax was not able to achieve the objective of redistributive justice as it was inequitable not
only in terms of coverage but also due to its unrealistic character and ineffective
administration. He suggested the introduction of agricultural income tax, shifting to
„family‟ as basic unit of assessment instead of „individuals‟ and withdrawal of favorable
tax treatment to firms.
 Sharma (1997) tried to evaluate the revenue potential of Minimum Alternative Tax
(MAT) levied on the basis of book profits of the company and Alternative Minimum Tax
(AMT) based on total assets of the company. He further examined the depreciation rates,
corporate tax rates and fiscal incentives available to companies in India. The study found
that 70 per cent of 1500 selected companies did not pay any corporate tax. The author
opined that existence of zero-tax companies was against the principle of equity and
justice in tax system. The study estimated that Government could collect net additional
revenue of Rs. 2,178 crore by enforcing MAT and Rs. 3,700 crore by enforcing AMT.
The researcher viewed that asset based minimum tax (AMT) seemed to be simple, more
effective and higher revenue generating as compared to MAT based on book profits.
Regarding tax relief, the study pointed out that lower tax rates together with less fiscal
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incentives could be more practical than high tax rates combined with large number of tax
reliefs. The study concluded that for attracting Foreign Direct Investment, corporate tax
rates should be lowered to bring them in conformity with East Asian Economies. Further,
depreciation rates prescribed under the Income Tax Act should be harmonized with the
rates 80 available under the Companies Act for improving the quality of corporate
governance.
 Das, Gupta and Mookherjee (1998) studied the role of incentives and institutional
reform in tax enforcement in India and compared it with other countries like Mexico,
Spain, Singapore, Philippines and Indonesia. The study revealed that income tax
compliance in India deteriorated during 1965-66 to 1994-95. The authors opined that
income tax revenue in relation to GDP was low not because of tax rates, exemptions,
amnesty schemes and non taxation of agricultural income but only due to poor
enforcement. They also opined that the two principal tools of enforcement in India,
search and seizure activity, and prosecution of tax offenders were ineffective for
checking tax evasion. On the basis of international experience, the study emphasized the
need for organizational restructuring, computerization of information system,
introduction of presumptive taxation and strict audit standards associated with strong
political support from higher levels. In the end, the researchers suggested for amending
the provisions regarding appeals, penalties and prosecution which were exploited by large
scale tax evaders.
 Jha (1999) examined the reasons for tax evasion, black money and implications of
offering amnesties to tax evaders in India. She opined that most important reason for tax
evasion was that it provided economic benefits to tax evaders. She further opined that
besides tax evasion, black income was also generated from illegal activities like
smuggling, trafficking in illicit drugs and gambling etc. On the basis of various estimates,
unaccounted income in India 81 was reported to be in the range of Rs. 350-700 thousand
crore, comprising more than 50 per cent of GDP. She recommended reduction in
marginal income tax rates for individuals, firms and corporations, which could help in
widening the tax base. She feared that amnesty schemes might lead to continued tax
evasion with the hope of continuation of such schemes in future. Finally, she suggested
that amnesty schemes should be eliminated to make tax administration more efficient.
 Singh and Jain (1999) in their research paper analyzed buoyancy and elasticity
coefficient for the corporation tax in India with reference to application of Laffer Curve
for the period 1951-52 to 1995-96. The data was collected from CMIE and Reserve Bank
of India publications. The study revealed that rationalization and harmonization of tax
structure under the new economic policy had led to increase in the share of direct tax
revenue in total tax revenue from 19 per cent in 1990-91 to 29.5 per cent in 1995-96.
Similarly, contribution of corporation tax had been increasing since 1950-51. It was
observed that reduction in corporate tax rates did not result in an improvement in tax
elasticity up to 1970-71. The buoyancy coefficient was found to be greater than unity
during the period of study. It was also noted that coefficient of elasticity was lower than
coefficient of buoyancy during the period of study. But the difference between the two
coefficients narrowed down during post reform period. The study also revealed that
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reduced corporate tax rates led to increase in corporate tax profit base, improvement in
elasticity of corporation tax and increase in corporate tax revenue during the post reform
period. The study concluded that all 82 these factors validated the „Laffer Curve‟ logic in
India. Lastly, the authors strongly recommended expansion of coverage, regular
adjustments for inflation, minimization of collection lags and phasing out various tax
incentives for further improvement in corporation tax elasticity

 Sreekantaradhya (2000) tried to study structure and reform of taxation in India. He

analyzed the tax structure prior to 1991 and various tax reforms that were implemented
during the period 1990-91 to 1999-2000. The study revealed that share of personal
income tax in total tax revenue of the Central Government increased to 15.21 per cent in
1999-2000 as compared to 9.33 per cent in 1990- 91. The coverage of personal income
tax was extremely limited because of exemption of agricultural sector and predominance
of unorganized sector in the economy. The study also pointed out that high marginal rates
and complicated rules were responsible for poor compliance. It had been further observed
that wide ranging incentives, a large number of zero tax companies and complex system
of corporate taxation had affected the corporation tax revenue negatively. The author
suggested some measures for improvement in tax system such as application of
presumptive taxation on unorganized sector of the economy, bringing the agricultural
income under tax net, adoption of tax deduction at source, compulsory filing of return on
the basis of certain economic criteria and rationalization of fringe benefit taxation
 Dipankor et al. (2001) evaluated the relative tax performance of a group of 16 states of
India for the period 1986-87 to 1996-97. The performance was measured by the tax- state
domestic product (SDP) rate and analyzed by using the technique of Quintile Regression.
The study revealed that states could be classified into four categories on the basis of tax
performance. First the consistently best performing states were the south western states
viz. Goa, Gujarat, Karnataka, Kerala, Rajasthan and Tamil Nadu. The next category of
states (the worst performing states) was eastern states of Assam, Orissa and West Bengal.
The study also revealed that the position of these two categories remained same over the
period of study. The third category of states was with medium level performance
throughout the period under study, which included the states of Bihar, Haryana, Madhya
Pradesh and Uttar Pradesh. The fourth category of states which started out at the
medium / top level in term of performance showed a declining trend later on were the
states of Andhra Pradesh, Maharashtra and Punjab.
 Task Force on Direct Taxes (2002) constituted under the chairmanship of Mr. Vijay
Kelkar by Ministry of Finance, Government of India submitted its report in 2002. It
was asked to suggest measures to rationalize and simplify direct taxes, improvement in
taxpayers` service and redesign procedures for strengthening enforcement so as to
improve compliance of direct tax laws. It recommended the following measures:
 The income tax department must increase expenditure on tax payers‟ services.
 The Permanent Account Number should be extended to cover all citizens and therefore
serve as a Citizen Identification Number.

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 The department should set up a structure for Electronic Data Interchange (EDI) with
some of the major departments.

 Sidhu (2003) carried out the study to ascertain the effectiveness of direct tax reforms
introduced during the post liberalization period by covering the span of ten years from
1991-92 to 2000-01. He observed that direct tax reforms could not contribute positively
to solve the fiscal problems of the country. The reduction in tax rates could not lead to
better tax compliance. Reforms had succeeded to increase the number of assesses but
failed to increase the Central Government revenue. The major share of direct taxes had
come from lower income group during the period of study. Therefore, the researcher
strongly recommended to review tax reform policies followed by the Government during
the post-liberalization period
 Sarkar (2004) examined various issues related to tax incentives in India by comparing
the same with other countries viz. United Kingdom, United States of America, France,
Japan, Singapore, Malaysia and Bangladesh. It was observed that all these economies
adopted some form of tax incentives and exemptions for economic development in
desired direction. However, in India tax incentive 89 provisions were more in number
and had been provided for a long time as compared to other economies. Author opined
that data available on tax incentives in India was less effective for analytical
interpretation. In the light of constraints, study concluded that tax incentive schemes had
been successful in mobilizing savings and capital formation in India during the post
independence era.
 Arora R.S. and Kumar (2005) attempted to study the performance of Income Tax
Department on the basis of secondary data collected from various reports of Comptroller
Auditor General of India during the period of 10 years from 1991-92 to 2001-02. The
study revealed that number of assesses and tax revenue increased, whereas cost of
collection declined during the study period. Further, number of pending assessments,
outstanding refund claims and number of mistakes in assessments increased considerably.
The study emphasized on improving the efficiency of Income Tax Department and
suggested recruitment of tax officers, their proper training, outsourcing of routine
activities, simplification of tax procedures and adoption of computer based technology
for achieving the same.
 Kumar (2006) attempted to evaluate income tax revenue efficiency of 17 major states of
India for the period 1989-90 to 2000-01 by using Stochastic Frontier Approach. The
study found that the state of Karnatka showed maximum revenue efficiency followed by
Punjab. Bihar and Uttar Pradesh were at the bottom with least efficiency preceded by the
state of Arunachal Pradesh. It was also found that ranks of different states with regard to
their revenue efficiency remained stable over the period of study, indicating that poor
performing states showed no improvement over the years. He highlighted that high
income tax rates and exemption limit had a negative effect on income tax revenue.
However, personal income and tax base had a positive effect on tax revenue. Author
opined that intensive audit for richer section of society, simplification of tax rules,

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introduction of pragmatic tax rates and good governance were needed for increasing
revenue efficiency
 Singh and Sharma (2007) made an attempt to study the perception of tax professionals
with regard to Indian Income Tax System by collecting primary data from 100 tax
consultants operating in Punjab and Haryana. They tried to investigate the role of tax
consultants played in the revenue collection process by helping their clients in
understanding the complex tax system and meeting their legal obligations. Factor
Analysis of data showed that seven factors –reduction in tax evasion, extension of relief
to taxpayers, incentives for dependents and honest taxpayers, broadening the tax base, e-
filing of returns, adequacy of deductions and impact of exempt-exempt tax system played
an important role in determining the effectiveness of Indian tax system. It was observed
that most of the tax consultants were satisfied with tax rates. However, majority showed
dissatisfaction with regard to price level adjustment. It was also observed that most of the
taxpayers consulted tax experts because they found it cheap.
 Saliha, T., & Abdessatar, A. (2011). The determinants of financial performance: An
empirical test using the simultaneous equation method. Economics and Statistics Review,
10(1), 1-19

RESEARCH DESIGN

STATEMENT OF THE PROBLEM

OBJECTIVES: _ To identify the elements of income and savings of the selected respondents of
the study. _ To study the pattern of tax planning by individual. _ To make appropriate suggestion
and conclusion.
STATEMENT OF THE PROBLEM: All the relevant information for the study has been
obtained from the representative samples of the salaried section and without referring to any
records. As the study is for current and also a short period, those data seen to be reliabl
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SCOPE OF THE STUDY: For assessing their groups total income basic pay, allowance and
income through employment and taxable perquisite were included. Further efforts have been
made for to find out the extent of other sources of incomes of the salaried assessee. In the
analysis the respondents were divided into different sub-group such as income group, age group,
department group, service group. In ascertaining the tax liability their potential tax payment is
computed without taking tax saving investment, the samples were collected from the assessee in
Coimbatore city only.

5.RESEARCH METHODOLOGY It deals with the definition of Research Problem, Research

Design, Methods of Data Collection, Sampling Design and Interpretation of Data.

6. TAX PLANNING: The planning is the arrangement of one’s financial affairs in such a way
that without violating in any way the legal provisions, full advantage is taken to allow tax
exemptions, deductions, concessions, rebates, allowances and other reliefs or benefits permitted
under the Income Tax Act. “Tax planning is not a post time of a few but it is necessity for all
honest tax payeRs. A wrong decision can mean an unbearable burden while a right step in the
right direction after proper tax planning can mean a lot of tax saving”- S.P.Metha.

Tax planning is nothing but tax avoiding formulates, it is a great art, which does not break law,
yet, its bonafide. It helps in saving the tax, the salient aspect to so call good tax planning is, i)
Bonafide nature of arrangements ii) Provision that laws are not violated

Effective tax planning requires one to loan one’s income and affairs even prior to actually
earnings the income. It is better to plan before than latter. A salaried person should be aware of
the income- tax laws as it related to income, the deduction and reliefs that are available. It is
intended that on becoming conversant with the details the people would be able to plan the
affairs in the manner whereby it maximize to take home pay

7. ANALYSIS: HYPOTHESIS THE SEX OF THE RESPONDENTS HAS NO INFLUENCE

OVER THE AMOUNT OF TAX PAID
Table : 7.1 SEX COMPOSITION AND TAX PAID
sex Below 15000 15000-30000 30000-45000
male 7 11 2
female 7 2 1
total 14 13 3

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Source: Primary Data Calculated value: 1.695 Degrees of Freedom – 5 Table value: 11.1@ 5%
level.

Since the calculated value of Chi-square (1.695) is less than the tabulated value of chi-square
(11.1) at 5% level of significance, the hypothesis is accepted. Hence, it can be suggested that, the
sex has no significant influence over the amount of tax paid.

HYPOTHESIS
AGE OF THE RESPONDENTS AND AMOUNT OF TAX PAID ARE INDEPENDENTS.
Table – 7.2 AGE AND TAX PAID

age Below15000 15000-30000 30000-45000

20-35 9 10 1
35-50 4 3 2
total 14 13 3

Source: Primary Data Calculated value: 58.585 Degrees of Freedom – 5 Table value: 21.003@
5% level. The hypothesis is rejected because of the fact that the calculated value of the chi-
square (21.003) of 5% level of significance. In other words, age has significant influence over
the amount of tax paid.

Result: The above correlation co-efficient shows that there is positive relationship between the
income and tax paid. It can be concluded that there is a high relationship between income and tax
paid.

8. FINDINGS The Chi-square analysis suggests that sex have influence over the amount of tax
paid ,where as the age of respondents has low influence over the amount of tax paid. It is evident
from the study that experienced employees are willing to pay tax because of several personal
factors. Further, the level of awareness of the respondents is significantly higher over the
different tax savings scheme. To eradicate that the govt. agency should come forward to
highlight the features of tax savings schemes. It can also be concluded that the senior employees
are diverting a portion of their income to other non-governmental schemes, which give very high
returns.
BTL INSTITUTE OF TECHNOLOGY & MANAGEMENT, BANGALORE-99 pg.
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 KIRAN METAL FINISHERS

a) The correlation analysis has revealed that there is a moderate high degree of correlation
existing between income of the respondents and savings, amount of tax paid, savings on tax
savings scheme. It can be concluded that, the respondents are diverting a portion of their income
to some other non-government schemes which gives them high returns and hence they are
willing to pay high tax.
International Journal of Interdisciplinary Innovative Research & Development (IJIIRD) ISSN:
2456-236X Vol. 02 Special Issue 03 | 2017

S1703118 www.ijiird.com 119

9. SUGGESTION Most of the professionals like Doctors, Lawyers and Business men earn more
than the other employees. But, their payment of tax is very less or completely nil when compared
to other employees. This is because there is no material evidence for the receipt of their income
and their employers cannot deduct tax payment from their income.

i) Since the tax is the main source of income for the govt., and the salaried class paying their tax
regularly (tax deduct at source), the government can come forward to implement some of the
welfare scheme by way of: 1. Housing loans 2. Loans for purchasing domestic appliance 3. Loan
for marriage etc., with moderate rate of interest 4. Loan for the education In the tax calculation,
the amount of DD and CCA can excluded from the net taxable income.

10.CONCLUSION It is found that on overwhelming majority of the salaried employee’s opinion

regarding direct tax imposed is high and very high. It is concluded that the salaried employees
are reducing the tax liability.

BTL INSTITUTE OF TECHNOLOGY & MANAGEMENT, BANGALORE-99 pg.

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