Old Tax Regime vs New Tax Regime in India: A ComparativeAnalysis of Financial Impact and Policy Implications

Abstract

The introduction of the new tax regime in India's Union Budget 2020 marked a pivotal change in the nation's personal income taxation. While the old regime offers numerous exemptions and deductions, the new regime simplifies tax filing by reducing tax rates and removing most benefits. This paper evaluates the two regimes through case studies, taxpayer surveys, and policy analysis. It aims to identify which regime offers greater financial advantages across different income groups and to assess the broader implications on taxpayer behavior and compliance.