Employees Channel Extra Income into Savings and Investments After Tax Relief

A growing number of salaried professionals are directing their additional income towards savings and investments following recent income tax exemptions. According to a report released by a leading financial advisory platform, nearly 50% of employees are now using their post-tax disposable income for wealth-building activities such as long-term savings, mutual funds, and fixed deposits.

 

The report, which covers the financial year 2025–26, shows a noticeable shift in financial behavior after the implementation of the new tax regime. With more disposable income in hand, many employees are making conscious decisions to secure their financial future.

 

Focus Expands Beyond Investments to Debt Repayment and Lifestyle Upgrades

While savings and investments remain the top priorities, around 30% of employees are also using their additional income to repay existing loans and clear debts. A portion of individuals is channeling their earnings towards lifestyle improvements, including better healthcare, education, and travel.

 

The report also highlights that with disposable income increasing by an average of ₹1.25 lakh annually, most people are choosing to invest at least ₹20,000 of this amount. This trend reflects a growing emphasis on long-term financial security and debt-free living.

 

Sector-Wise Investment Trends

The data reveals significant variations across sectors. In the technology and engineering sectors, about 76% of employees are investing their extra income, making them the most financially proactive group. They are followed by professionals in the automobile industry (63%) and the financial services sector (57%).

 

Employees in FMCG companies and the hospitality industry are also showing an increased inclination towards savings and investment, although at a slightly lower percentage compared to other sectors.

 

Delhi and Gurugram Lead in Financial Planning

Employees in Delhi and Gurugram are among the most proactive when it comes to managing their additional income. In these regions, 63% to 64% of salaried professionals are prioritizing savings and investments. Additionally, 44% are actively repaying loans and improving their financial health.

 

Mumbai and Bengaluru also show strong trends, with 51% of workers channeling their additional earnings into savings or investments. Financial experts suggest that this growing awareness reflects a positive shift in personal finance habits among India’s working population.