Old vs New Tax Regime: Is investing in 80C still beneficial? Know the right strategy..
Old vs New Tax Regime: For a long time, people have been investing in PPF, ELSS mutual funds, life insurance, or children's tuition fees under section 80C to save tax. These used to give a rebate of up to Rs 1.5 lakh annually. But after the introduction of the New Tax Regime, the situation has changed. In the new regime, tax rates are low, but exemptions and deductions are not available. In such a situation, the question arises whether it is still wise to invest in 80C?
Old vs New Tax Regime
The new tax regime is easy. There is neither the hassle of adding bills to it, nor the compulsion to invest in a hurry at the end of the year. At the same time, the old tax regime can still be beneficial for those who take more exemptions in HRA, 80C, 80D (health insurance), home loan interest, etc.
The real importance of investment
Experts believe that investment should not be done only to save tax. It would be better to review the portfolio and see which investments help create wealth in the long run and which are made only to save tax. Speaking to Moneycontrol, Abhishek Kumar, a SEBI-registered investment advisor, says, "If your total deductions and exemptions give more tax savings than the new regime, then choosing the old regime will be beneficial. But the focus of investment should always be on creating long-term assets, not just on saving tax."
Flexibility in the new regime
One of the special features of the new tax regime is that it has the option to choose between the old and the new regime every year; that is, you can compare year after year and choose the one that is beneficial for you. Deepak Kumar Jain, founder of Taxmanager.in, says, "This flexibility allows investors to compare every year. They can calculate both the regimes and choose the option that gives more savings."
Don't forget the important things
Experts warn that due to the lack of pressure to save tax, many people may stop investing, which is dangerous. Important investments like life insurance and health insurance should always be made, whether tax benefits are available or not.
Disclaimer: This content has been sourced and edited from News 18 hindi. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
