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New Tax Regime: Should one continue to invest in tax saving instruments such as PF, PPF, LIC?
Finance Minister Nirmala Sitharaman introduced an alternate new tax regime in Union Budget 2020-21 which provided for lower tax rates for individuals compared to tax rates under the old tax regime. However, it comes with the condition that a taxpayer has to forego several deductions and rebates available under the old tax regime. An individual has an option to choose either old tax regime or new tax regime for each financial year. However, based on developments in subsequent years, it is apparent that the government is looking to make new tax regime more attractive progressively. Under the old tax regime, deduction from taxable income was available under Section 80 C in respect of certain specified investments viz contribution to Provident Fund, Public Provident Fund, LIC, ELSS, NPS and so on . Maximum amount permissible for deduction in a financial year is ₹1,50,000. As the tax benefit is now foregone for an individual opting for new tax regime, he/she needs to evaluate afresh investment decision based on three fundamental principles of safety , liquidity and return. Contribution to Provident Fund (PF) Public Provident Fund (PPF ) Life Insurance Premium (LIC) ELSS/ELSS Funds Tax Saving FDs National Pension Scheme National Savings Certificate Get the detailed view -https://www.livemint.com/money/personal-finance/budget-2024-new-tax-regime-should-one-continue-to-invest-in-tax-saving-instruments-such-as-pf-ppf-lic-11705987161493.html Source - mint
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