Over 63% of Indian Taxpayers Opt for Old Regime, According to Report

• ByStartupStory     |    December 11, 2023

In a recent survey conducted by PB Fintech, the parent company of Policybazaar, it has been revealed that more than 63% of Indian taxpayers are adhering to the old tax regime, while 37% have opted for the new one. The survey, encompassing 1,263 respondents across 350 cities in India, sheds light on the preferences of taxpayers in the country.

The survey indicates a notable trend among women, with 74% of them meticulously selecting their tax regime through rigorous calculations, slightly surpassing the 71% among men. When it comes to long-term investment plans, those sticking to the old regime are primarily allocating funds to provident fund investments, followed by life insurance and life insurance instruments.

Sarbvir Singh, Joint Group CEO of PB Fintech, emphasized the financial prudence exhibited by individuals, stating, “The fact that 80% of the individuals made a conscious choice based on tax liability reflects a collective financial prudence… this foresight was more or less uniformly represented across tiers, income groups, age groups, and genders.”

Breaking down the demographics of the survey, 82% of respondents were men, and 15% were women. In terms of occupation, 67% were salaried employees, 15% were business professionals, 6% were professionals such as lawyers and doctors, and 12% were retired individuals. Notably, a third of the respondents did not perform any calculations before choosing their tax regime. Among the remaining two-thirds, 38% based their decision on advice from financial advisors.

When probed about the reasons for choosing a specific tax regime, 46% expressed a preference for the old regime due to the tax-free status of their long-term investments, while 26% cited retirement plans as a decisive factor. Interestingly, the survey also revealed that 67% of salaried individuals stuck to the old tax regime, while the new tax regime was favored by 49% of businesspersons, marking the highest preference among all categories.

This survey provides valuable insights into the decision-making processes of Indian taxpayers, showcasing a blend of strategic financial planning and individual preferences across various demographics.

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