IMPACT OF NEW TAX REGIME ON COMMON PEOPLE

Introduction: The Indian taxation system has undergone transformative changes with the introduction of the new tax regime under Section 115BAC of the Income Tax Act, 1961. Launched in FY 2020–21, this alternative system offers lower tax rates but removes most exemptions and deductions that were available under the old regime. This shift intends to simplify tax compliance, promote transparency, and broaden the tax base. However, the impact on individual taxpayers—particularly those with varying income levels, occupations, and investment behaviors—remains an area of active inquiry. In a rapidly digitizing economy like India, fintech platforms such as ClearTax have also revolutionized tax filing, influencing how individuals interact with the tax system. With a growing middle class, particularly in urban centers like Bengaluru, assessing the awareness, compliance, and financial decisions of individuals under the new regime becomes imperative. This study thus evaluates the effects of the new tax policy on taxpayers' liabilities, behavior, and overall financial planning, offering insights into its effectiveness and public perception.