Indian youth prioritising savings under new tax regime

New Delhi : Indian youth prioritising savings under new tax regime are increasingly focusing on long-term financial security, channeling surplus income into investments and debt repayment rather than discretionary spending, according to a recent report.

The report by job portal Naukri, based on a nationwide survey of over 20,000 job seekers earning up to Rs 12.75 LPA — falling under the zero-tax bracket in the new FY’26 tax regime — highlighted a clear shift toward financial prudence among India’s youth.

Nearly 60 per cent of respondents said they are directing their surplus income toward savings and investments, while 30 per cent are focusing on repaying debts. Only a small fraction is spending on lifestyle upgrades (9 per cent) or travel and leisure (4 per cent).

Professionals in emerging technologies lead the trend, with 76 per cent saving their extra income. Employees from the auto sector (63 per cent) and pharma (57 per cent) also demonstrate strong saving habits. In the FMCG (64 per cent) and hospitality (over 60 per cent) sectors, employees are showing a strong commitment to long-term retirement planning and investments.

“The findings indicate a generational shift in financial behaviour. Young professionals are laying the foundation for long-term security rather than opting for immediate consumption. Regional and sector-specific patterns further underscore this evolving trend,” the report stated.

Freshers in their first jobs remain the most likely to spend their tax surplus on lifestyle upgrades (31 per cent) or travel (14 per cent). Yet, with just one year of experience, 69 per cent prioritise savings, more than double the proportion of fresh graduates at 34 per cent.

Regionally, Delhi and Gurgaon lead in savings, with 63 per cent and 64 per cent of professionals, respectively, setting aside surplus income. Chennai stands out for debt repayment, with 44 per cent of respondents directing extra funds toward clearing debts. Mumbai ranks highest in retirement-focused savings, with 51 per cent channelling their income toward retirement funds.

The report also noted uneven awareness of the new tax regime. Freshers are the most informed, with 64 per cent reporting complete awareness of benefits. Among professionals with over five years of experience, 57 per cent reported full awareness, while overall, 43 per cent admitted being unclear or entirely unaware of the changes.

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