The Evolving Landscape of Personal Finance: A Study of Tax Planning Strategies Among Gen Z Professionals in India.

The Evolving Landscape of Personal Finance: A Study of Tax Planning Strategies Among Gen Z Professionals in India.

Dr. B Raghvendra Rao*,  Prateek S, Nyasa M S , P Amarnath Reddy,  Pooja Vinod Kulkarni, Pradeep V C , Pradhiksha S

Professor*, MBA student 2025-27 batch

Faculty of Management Studies, CMS Business School,

JAIN (Deemed-to-be-University),

Bangalore, India

I.ABSTRACT

This paper explores the changing tax planning and financial behavior landscape in India, particularly with regard to the transition from previous generations to Generation Z professionals. Findings suggest that age and maturity are key considerations in tax planning, with previous generations taking a more scientific approach to financial planning, while younger people require simpler instruments for savings because of a lack of understanding about more complex planning strategies. More recent findings suggest that while Indian students and young professionals have a broad understanding of taxation concepts, they often lack a detailed understanding of particular procedural requirements and legalities. This is an important consideration, as it would appear that the inclusion of formalized tax education within academic institutions is a necessary step in ensuring that young professionals become responsible, tax-savvy citizens who can effectively manage the complexities of the Indian tax system. The literature also examines the role of financial literacy as the key driver of budgeting, savings, and intelligent investment decisions among young professionals. However, it is suggested that while digital access to information is important, it is not necessarily a key driver of sound financial decision-making; rather, behavior, psychological considerations, and social support are more important in determining actual financial well-being. Generation Z professionals are often characterized as a group of "cautious optimists" who "hustle" towards financial independence by combining family influence with personal income. They are also said to play a "dual game" in which they secure their financial futures through traditional means such as SIPs, equity, and gold, while also seeking high-risk opportunities in the world of crypto. Despite their tech-savviness, their journey is often influenced by herd mentality and the fear of loss first, which shows that their financial peace is more dependent on behavioral changes than simply using technology. Comparative studies between generations reveal that, whereas Gen X focuses on stability and the “long game,” Gen Z requires ethical and sustainable solutions and high-risk digital assets. Interestingly, older millennials tend to be more confident in navigating complex financial regulations than Gen Z. The lack of experience and confidence in navigating financial regulations acts as a barrier, preventing Gen Z from participating in more organized and proactive tax planning. Moreover, studies on compliance behavior reveal that institutional factors, particularly the use of e-filing systems and tax penalties, have a more substantial positive effect on compliance than tax knowledge alone.

Keywords: Generation Z, Tax Planning, Financial Literacy, Tax Compliance, Investment Behavior, Digital Taxation, Indian Taxpayers, Financial Awareness.