A Study on the Impact of the New Tax Regime Under Section 115BAC on Middle-Class Taxpayers in India
Harshana B R¹, Ragavarthini N², Anand Sathyan³, Rahul Gowda M⁴, Dr. Tejaswini S⁵
¹²³⁴ MBA 2025–27, Faculty of Management Studies, JAIN (Deemed-to-be University)
⁵ Assistant Professor, Faculty of Management Studies, JAIN (Deemed-to-be University)
Abstract
With the implementation of Section 115BAC of the Income Tax Act, 1961, by the Government of India, the agenda was fulfilled of providing a simpler and easier way to manage your taxes as a result of a reduced tax bracket. Overall, individuals will now have an easier time managing their taxes and therefore a higher actual take-home pay. This makes it more appealing for people who do not rely on tax benefits or deductions when they file tax returns. For the large segment of the middle-class population that depend on tax benefits or deductions, the new tax regime opens up new opportunities. As the middle-class population in India comprises a significant number of individuals, many of whom have access to tax benefits or deductions, including contributions to one's retirement savings through the use of Section 80C; the cost of health insurance required under Section 80D; or the costs associated with owning a home, there is an even greater likelihood that many middle-class taxpayers will benefit from tax deductions and/or benefits from the newly introduced tax regime. The research design selected to complete this study will be descriptive and analytical in nature and will rely only on secondary data that will come from government publications, written literature, and tax-related publications. The conclusion of the research will show that the new tax regime will benefit the middle-class taxpayer with minimal to no deductions; however, the middle-class taxpayer that has made investments in tax-deductible instruments will find the old tax regime to be more beneficial for them in their tax-planning activities.
Key words
New Tax Regime, Old Tax Regime, Section 115BAC, Income Tax, Middle-Class Taxpayers, Tax Reforms in India, Tax Planning, Tax Deductions, Financial Behaviour, Savings and Investment, Personal Income Tax Policy.
