An Empirical Analysis of Factors Influencing Taxpayers’ Preference between the New and Old Income Tax Regimes

The present study examines the factors influencing taxpayers’ preference between the New and Old Income Tax Regimes in India. Based on primary data collected from 210 respondents through a structured questionnaire, the study analyses the association between annual income, tax awareness, investment and tax-saving behaviour, and taxpayers’ perceptions. Statistical analysis was conducted using the Chi-Square Test, One-Way ANOVA, the Brown–Forsythe test, and the Paired Samples t-test. The findings indicate that the New Tax Regime was preferred by 70.5% of respondents. No statistically significant association was established between annual income and regime preference. However, significant differences were observed in tax awareness and investment and tax-saving behaviour across preference groups. Respondents also reported significantly higher mean perception scores for the New Tax Regime than for the Old Tax Regime. The study highlights the relevance of tax awareness and financial behaviour in understanding taxpayers’ regime preferences.