When To Keep Investing In Tax-Saving Products Even Under New Regime
Published by Outlook Money
Abhishek Kumar's role: Quoted
Abhishek Kumar said some of these investments build discipline through lock-ins and keep investors from acting on impulse in volatile markets. He explained the role of ELSS, PPF and SSY, and the NPS employer-contribution deduction still available under the new regime.
What Abhishek Kumar said
Should I stop investing in tax-saving products if I move to the new tax regime?
Not if they still fit your plan. Some of these investments build financial discipline through their lock-ins and keep you from acting on impulse when markets are volatile, and that value does not depend on the tax benefit. ELSS is a good example: it is known as a tax-saving tool, but its real value lies in helping you build a solid equity portfolio over time.
Do PPF and Sukanya Samriddhi still make sense without the tax deduction?
For investors who want stable returns on the debt side, I see PPF as a useful instrument, and its 15-year maturity helps build a sizeable corpus. For parents saving for a daughter, Sukanya Samriddhi Yojana suits long-term goals such as her education, and its lock-in structure keeps the savings disciplined. Both earn their place in a plan for these reasons, regardless of which tax regime you choose.
Was there any NPS tax benefit left under the new regime?
Yes, for employer contributions. Under the rules for FY2025-26, Section 80CCD(2) let salaried employees under the new regime deduct what their employer paid into their NPS account, subject to a cap of 14 per cent of basic salary. An employee's own contribution under Section 80CCD(1), however, was not eligible for a deduction under the new regime.
In our words, from what he said in the piece. General information, not personal advice.
More of Abhishek's views on money management
With the new tax regime now better for most taxpayers after Budget 2025, the article asks whether people should stop tax-saving investments. It argues for keeping instruments that fit one's goals and reviews ELSS, PPF, NPS, term and health insurance and SSY under the new regime.
Publisher source
When To Keep Investing In Tax-Saving Products Even Under New Regime