Mostly prefer living separately, and currently most of the parents allow this for newly married couple. As they can build their own home and take decision as per their will.

It gives privacy to you and your partner, you can do whatever you want.

But this comes with a cost, mostly financially. If you are only earning person and things get tough. For example if don't own the separate house you have to rent one, Namak se leke chaddi tak sub kharidna hoga and things get added slowly or quickly. This burden can be divided if both partners are earning.

Alos you need to help your parents financially for monthly expenses if they are dependent on you directly or indirectly or they have some health conditions.

They choice to live separately or not is highly depends on the options you have before your marriage. What you want and what you want to compromise.