63% Indians Stick To Old Tax Regime: Policybazaar Survey

A recent survey conducted by Policybazaar reveals that 63 per cent of participants have opted for the Old Tax Regime and 37 per cent of participants have opted for the New Tax Regime. The participants said that owing to the tax-saving benefits and a sense of security offered by long-term savings instruments one can leverage in the former, more people are opting for the Old Regime. The findings have also revealed proactiveness among respondents as 71 per cent have made a choice after meticulous calculations.

The survey also highlights the shift in gender dynamics, with 74 per cent of women calculating tax liability under both regimes, slightly exceeding the 71 per cent of men. A deeper analysis of investment behaviour across gender, region, employment type and age groups indicates that there is a growing trend of financial prudence across India.

The report indicates a shifting mindset as 62 per cent of respondents in the age bracket of 18 to 30 years who would typically be expected to choose short-term investments and gains, opted for the Old Tax Regime citing long-term investments as the reason. In fact, majority of respondents in the 18-50 age group have chosen the Old Regime, signalling a growing openness towards long-term investments.

Sarbvir Singh, President and Joint-Group CEO at Policybazaar Fintech, expressed optimism, stating, “It is evident from our survey that the Indian consumer has a deep-rooted, savings-centric mentality and approaches financial planning with mindfulness. The trends showcased in the report indicate a promising future for financial security.”

Tier-I respondents display a maximum propensity to save tax through long-term investments as 69 per cent have chosen the Old Regime. Also, Tier 2 and 3 respondents have chosen the Old tax regime at 61 per cent and 59 per cent, respectively, strategically planning their investments. Southern India shows the highest investment readiness with 65 per cent takers for the Old Regime, but even in the North, West and East, this statistic sits well above 50 per cent.

The survey highlighted the Public Provident Fund and life insurance (including Unit linked Insurance Plans and traditional policies) as the most favoured tax-saving instruments, chosen by 39 per cent and 34 per cent of respondents, respectively. 

“Taxpayers are now considering both immediate tax benefits and long-term gains from retirement-linked instruments like provident funds, pensions, and insurance. This is in perfect alignment with our 15-year-long mission of helping Indian consumers make more informed financial decisions. This trend is a testament to the continued efforts by government bodies and financial institutions to promote financial literacy, fostering a more resilient and informed financial ecosystem in India,” Singh added.