Behavioural and Economic Determinants Influencing Taxpayer Preference for the New Tax Regime in India: A Comparative Analysis with the Old Tax Regime

India’s personal income tax structure has undergone a major transformation with the introduction of the New Tax Regime under Section 115BAC. The reform aims to simplify taxation by offering reduced tax rates while eliminating most exemptions and deductions available under the Old Tax Regime. Despite policy intentions to promote ease of compliance and transparency, taxpayers continue to display varied preferences between the two regimes. This study examines the behavioural and economic determinants influencing taxpayers’ decisions while selecting a tax regime. Using secondary data from government reports, academic literature, and taxation policy studies, the research evaluates how income level, deduction benefits, perceived simplicity, compliance effort, and professional advisory influence shape taxpayer behaviour. The study conceptualizes tax regime choice as both an economic and behavioural decision rather than a purely mathematical comparison. While deduction-oriented taxpayers may benefit from the Old Tax Regime, individuals prioritizing flexibility and reduced documentation are expected to prefer the New Tax Regime. Primary data collected through structured questionnaires will later validate the conceptual relationships proposed in this study. The research contributes to policy evaluation and provides insights for policymakers, organizations, and financial advisors in understanding taxpayer adoption behaviour.