Tax planning is one of the strategies to reduce tax liabilities in a year. Every tax payer want to reduce the tax liability by utilizing tax exemption, the deduction allowed to various heads of income, etc. Tax Planning is a systematic tool that involves the usage of exemptions u/s 10, Deductions u/s 80 and rebates u/s 87A. The Finance minister of India introduced new tax regime under section 115 BAC in the budget 2020 giving individual assessee and HUF taxpayers an option to pay income tax at lower rates. Income earned from Previous Year (FY) 2020-21 which begins from 1 April 2020, relates to AY 2021-22 is taxed under new tax regime. New tax regime is an option to pay income tax from Financial Year 2020-21. Only few deduction / exemptions can be claimed under new tax regime. Under new tax regime an individual assessee cannot get tax saving benefit by investing money in specified instruments, Medical expenses incurred etc. This paper analyses how new income tax regime impact on the perception of the income tax payers; whether to opt old tax regime or not?

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Keywords: New Tax Regime, Tax Planning, Tax Saving Benefit, Old Tax Regime.