Old Tax Regime clear winner, preferred by 63% taxpayers who prioritize long-term investments, tax-saving: Survey

In a survey conducted by insurance aggregator Policybazaar, 63 per cent of the people preferred the Old Tax Regime and the rest, 37 per cent were in favour of the New Tax Regime. It was found out that, owing to tax-saving benefits and compliance with the security of the long-term saving instrument, the Old Regime remains the preferred choice of taxpayers.

The survey also points out that 71 per cent of the respondents' choices were based on thorough calculations and there's also been a shift in gender dynamics — 74 per cent women calculated their tax liability under both regimes, which slightly exceeds the 71 per cent of men who did the same.

The report indicates a shift in investment mindset, with 62 per cent of respondents in the age bracket of 18 to 30 years choosing the Old Tax Regime, citing long-term investments as the reason.

The report claims that the demography in Tier 1 cities is the most financially aware, with 69 per cent of respondents choosing the Old Income Tax Regime due to their inclination to save tax through long-term investments. Tier 2 and Tier 3 cities are also financially aware, with 61 per cent and 59 per cent of the respondents consciously opting for the Old Income Tax Regime.

The report also emphasised that the Public Provident Fund (PPF) and life insurance are the most preferred modes for tax-saving, with 39 per cent and 34 per cent of respondents choosing them, respectively.

Other modes of tax-saving tools include ELSS, home loans, NPS, SSY, Tax Saver FD, donations/charity, SCSS, NSC, infrastructure bonds, and education loans — that are preferred by 3 per cent to 39 per cent of all respondents.

In southern India, 65 per cent of respondents prefer the Old Income Tax Regime, with respondents in northern, western, and eastern India clocking well above 50 per cent in this regard. The survey was conducted across 350 cities with people who fall within the taxable income bracket.