In recent years, the Government of India introduced a new personal income tax system that offers lower tax rates but removes many common deductions, especially those available under Section 80C.  The introduction of the new tax system has brought about changes in the attitude of people towards savings and investments. In this paper, the effect of the new tax system on the behavior of individual taxpayers with respect to their investments is examined. Primary data were gathered from individuals using structured questionnaires. Statistical tests were performed to determine whether the lack of Section 80C benefits has influenced the behavior of individuals with regard to their investments in old age funds, equity linked savings schemes, and insurance. The results have revealed that although tax benefits are crucial in financial planning, most taxpayers continue to invest with the aim of achieving their long-term financial objectives and not just because of the tax benefits..