![](https://indiaadvocacy.in/wp-content/uploads/2023/12/chained-taxpayer-with-bags-full-taxes_107173-11277.jpg)
In a recent “India’s Investment Readiness” survey conducted by Policybazaar.com across 350 cities, 63% of respondents expressed a clear preference for the Old Tax Regime over the New Tax Regime. The survey, targeting individuals within the taxable income bracket, aimed to understand the factors influencing Indians’ choice of tax regimes, especially with the New Tax Regime becoming the default option.
Factors Driving Preference
The findings reveal that tax-saving benefits and a sense of security offered by long-term savings instruments are key drivers behind the continued popularity of the Old Tax Regime. PPF (Public Provident Fund) and life insurance emerged as the most favored tax-saving instruments, chosen by 39% and 34% of respondents, respectively.
Demographic Shifts in Financial Prudence
The survey suggests a positive trend of financial prudence across India, with 71% of respondents making their tax regime choice based on meticulous calculations. Interestingly, women exhibited a slightly higher proactive approach than men, with 74% of women calculating tax liability under both regimes. Across age groups, a noteworthy shift is observed, with a majority in the 18-50 age group opting for the Old Regime, signaling an openness towards long-term investments.
Regional Dynamics and Preferred Instruments
Demographic sections traditionally limited in financial knowledge are showing recovery, with Tier 1, 2, and 3 respondents actively opting for the Old Regime. Southern India displayed the highest investment readiness at 65%, reflecting a collective shift in financial behavior.
Insurance and PPF: Shaping the Tax-Saving Landscape
The survey highlights a shift towards diversified investments, with PPF and life insurance emerging as the top tax-saving tools. This reflects an evolving financial landscape, indicating heightened awareness, prudent decision-making, and a preference for long-term financial stability among Indian investors.
These insights collectively paint a picture of a savings-centric mentality, where individuals are not only considering immediate tax benefits but also looking towards long-term gains from retirement-linked instruments, provident funds, pensions, and insurance.