The article examines how income tax in Serbia affects personal savings through two channels: the direct impact on investment returns and the indirect impact on disposable income. The study found that a balanced tax system that doesn't heavily favor either labor or capital income is best for savings. If Serbia were to introduce a new income tax with a 15% rate and more exemptions for labor income, savings would decrease by 0.27%. This suggests that increasing capital income tax would hurt savings more than cutting labor income tax would help. Overall, the study shows that using tax policy to boost savings in Serbia would have limited success.