A Public Perception towards Present Income Tax Rates with Special Reference to Tumkur City

Abstract

This study explores public opinion on the newly proposed income tax slab rates in India, focusing on how these changes are perceived to affect individuals\' financial situations and the level of public awareness about the new tax structure. By analysing responses from different demographic groups, the study identifies which segments are more supportive of the changes and examines their reasons for this support. It also compares views on the new tax slab rates with those on the previous tax structure to offer insights into the public’s perception of the tax policy shift. The findings provide a comprehensive view of public expectations and awareness, illustrating how these changes impact financial behaviour and preferences. The income tax act, implemented nationwide, ensures that higher earners contribute their fair share. The tax system is designed to address illegal earnings and enforce profit taxation according to government regulations, supporting economic growth. Tax revenues are used to fund essential services such as schools, colleges, hospitals, and infrastructure projects, providing benefits through exemptions and deductions, including those under sections 80C and 80CCD. Additionally, the government\'s tax policies aim to stimulate investment, create jobs, and drive economic development in India.

Introduction

The Income Tax Act in India began in 1860, with the current Income Tax Act of 1961 effective from 1962. All Indian residents earning income must pay tax, which is structured in slabs under two regimes: the Old and the New. The Old Regime offers higher rates but allows various exemptions and deductions for tax savings, benefiting those who invest strategically. The New Regime has lower rates but fewer deductions, suitable for taxpayers with minimal exemptions. Taxpayers (except business income earners) can switch between regimes annually to optimize tax liability.

For FY 2024-25, the Old Regime has progressive slabs from 0% up to 30% on income above ?15 lakh, while the New Regime introduces different slab rates starting at 15% for incomes over ?12 lakh.

A study conducted in Tumkur city surveyed 52 respondents (mostly students aged 21-30) to assess public awareness and opinions about current tax rates. Results showed 76.9% awareness of income tax slabs, with social media (63.5%) being the primary source of tax information. About half the respondents found the current tax structure easy to understand, while the rest found it difficult or somewhat understandable.

The literature review highlighted that while the new tax system supports lower-income earners, the old system benefits those utilizing exemptions and investments. Research emphasizes the importance of tax awareness for better financial planning and economic growth.

Conclusion

The study exploring public views on the proposed changes to income tax slabs reveals several significant insights. A large number of individuals are concerned about how the new system may impact their financial well-being, especially in terms of disposable income. It also shows a variation in awareness levels, with some taxpayers well-informed and others lacking clarity. Interestingly, support for the new tax regime appears stronger among younger individualsand higher-income groups, likely because they foresee greater benefits under the revised structure. The research highlights a clear division in public opinion, with some favoring the simplicity of the new system, while others lean towards the tax-saving opportunities offered by the older framework. In conclusion, these findings stress the importance of increased awareness efforts and educational outreach to help citizens understand their options and make well-informed financial decisions regarding their tax liabilities.

References

[1] IJSREM (Jain et al., 2025): Awareness and Perception of Tax Reforms Among Small Business Owners and Individuals in India—includes data from Bengaluru, Karnataka and explores public perceptions of direct tax compliance, awareness, and challenges IJSREM. [2] Mangi Lal Jain (2024): In Evaluating Public Perception of Tax Reforms and Their Impact on Economic Growth (survey across multiple states including Gujarat and Tamil Nadu), the study explores how people perceive fairness and economic impact of direct tax reforms in India theeconomicsjournal.com. [3] NIPFP Survey (Suranjali Tandon & R. Kavita Rao, 2017): Explores public attitudes toward filing returns, institutional trust, complexity of process, and perceived purpose of paying taxes across India—offers a baseline for understanding perceptions in Karnataka NIPFP. [4] Tumakuru District Profile (Wikipedia) provides socioeconomic context: Tumkur features a growing middle-class population, rising literacy rates, and substantial direct tax contributions—helpful background for situating tax-related perceptions in the region Wikipedia. [5] Jain, M.L. (2024). Evaluating public perception of tax reforms... Int. Journal of Finance Manage Econ, 7(2), 385 392. [6] Kiran Kumar, K.S. Gagan Deep, Vandana Kumari & Girish Muthu V. (2025). Awareness and perception of tax reforms among small business owners and individuals in India, IJSREM, CMS Business School, Bengaluru. [7] Tandon, S., & Rao, R.K. (2017). Perceptions of tax compliance in India, NIPFP.

Copyright

Copyright © 2025 Mrs. Bindu R, Mr. Niteesh K B. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.