New Tax Regime: Why should you still opt for tax-saving instruments such as PPF, NPS, NSC?

In FY 2023-24, the new tax regime became a default regime. While the new tax regime may have diminished the immediate tax incentives, Trivedi argues that the decision to invest in these instruments should be driven by the investor's broader financial goals, including retirement planning and risk tolerance. “The new tax regime offers individuals the flexibility to choose investments that align more closely with their financial goals, risk appetite, and liquidity needs, without the compulsion of tax-saving motives. Investors can now focus on options with better returns or withdrawal flexibility, rather than locking funds into tax-saving schemes.” Agrawal underscores that the new tax regime enables individuals to focus on investment strategies that best suit their long-term wealth generation, rather than just looking for instruments that offer tax relief. Sudhir Kaushik, Co-Founder & CEO of Taxspanner suggests that taxpayers who wish to build long-term wealth without being penalised should still consider tax-saving investments such as ELSS, NPS, and ULIPs under the old tax regime.