By Amarpal S Chadha
The financial landscape is changing, and young Indians are approaching wealth in new ways. Gen Z is rewriting the rules with a focus on flexibility, high-growth investments, and a digital-first mindset. This transformation isn’t just about shifting investment preferences; it’s a reflection of evolving tax structures and financial priorities.
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The introduction of the new tax regime (NTR) has changed the game. Offering lower tax rates but fewer deductions, it provides young investors with more disposable income and greater flexibility in allocating their resources. Free from tax-driven investing constraints, Gen Z is directing its finances toward high-growth assets, digital investments, and alternative income streams, fundamentally redefining what it means to create wealth.
Gen Z: The digital-first risk takers
Gen Z has redefined investment strategies, focusing on growth potential rather than tax-saving considerations. The NTR, which eliminates most deductions, has encouraged this generation to adopt diverse, high-risk portfolios comprising stocks, ETFs, crypto and commercial real estate like Airbnb rentals.
With the latest proposals of the government to tax incomes only for earnings above `12 lakh under the new tax regime, Gen Z benefits from a tax system that recognises their financial behaviour of having freedom to choose/design their investment pattern. Also, introduction of taxes on Virtual Digital Assets in the recent past is a recognition of the new era of income generation.
Gen Zs are actively seeking financial education on social media platforms like YouTube, Twitter, and Instagram. They actively trade, monitor markets, and explore high-return strategies, viewing investing as an ongoing practice rather than an annual chore tied to tax savings.
Though a large percentage of Gen Z has embraced new-age financial investment options, a significant percentage of the Gen Z believe in “live out loud” lifestyle that gained momentum post-Covid. Gen Z tends to have a more expenditure-focused mindset, prioritising luxury and experiences.
Rise of passive income
Perhaps the defining trend among Gen Z is their emphasis on building passive income and aiming for early retirement. Many have no intention of adhering to the traditional 9-to-5 grind into their 60s; instead, they structure their finances to foster financial independence in their 40s.
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This new mindset represents a significant shift from traditional wealth-building strategies,
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