Journal Press India^®

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The implementation of a dual tax regime under Section 115BAC of the Income Tax Act, 1961, introduced a significant shift in India’s tax structure by allowing individual taxpayers to choose between the old regime with its numerous deductions and exemptions and the new regime, which offers lower tax rates and simplified compliance but without most traditional tax-saving provisions. This study investigates how taxpayers perceive these two regimes by analysing data from 200 respondents across Karnataka, the findings reveal that younger individuals and those with limited tax-saving investments tend to prefer the new regime for its simplicity and higher liquidity, while older, salaried individuals and those with long-term financial commitments favour the old regime due to its tax planning advantages. Ultimately, the research underscores the importance of clear communication to help taxpayers make informed choices, and calls on policymakers to ensure both regimes are equally understood to diverse financial circumstances.

Keywords

Old tax regime; New tax regime; Tax payers; Government; Income tax

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