80C Investments That Still Work Under the New Tax Regime

With the government encouraging the new tax regime by offering lower tax rates but removing popular exemptions like Section 80C, many taxpayers are rethinking their investment plans. Interestingly, 72% of taxpayers have already shifted to the new system, signalling a move away from traditional tax-saving strategies. However, some investments previously tied to Section 80C still provide excellent financial benefits, even without the tax breaks. Let’s explore 3 such options.

1. Equity Linked Saving Schemes (ELSS): High Returns with a Short Lock-In

ELSS is a mutual fund category that invests primarily in equities and comes with a mandatory lock-in period of 3 years. While its earlier charm was the tax deduction under Section 80C, it continues to be a solid choice for wealth creation.

Key Features

• Encourages disciplined investing by restricting early withdrawals.
• Provides market-linked returns with exposure to various sectors and market sizes.
• Over the last decade, average ELSS funds have delivered returns of over 13%.

For new investors, ELSS offers an accessible way to benefit from the equity market’s long-term growth, making it a worthy addition to your portfolio.

2. Public Provident Fund (PPF): Safety with Guaranteed Returns

The PPF remains a popular option for risk-averse investors. Backed by the government, it offers attractive interest rates and compounding benefits over 15 years.

Key Features

• Completely risk-free as the government backs it.
• Earnings remain tax-free even under the new tax regime.
• Ideal for long-term savings, ensuring portfolio stability.

Even without tax deductions, the PPF’s safety and consistent returns make it a cornerstone for financial security.

3. National Pension System (NPS): Secure Your Retirement

Designed for retirement planning, the NPS offers a mix of equity, corporate bonds, and government securities, allowing investors to tailor their asset allocation.

Key Features

• Encourages retirement savings through withdrawal restrictions.
• Balanced allocation between equity and debt for steady growth.
• Employer contributions (up to 14% of basic salary) still receive tax benefits.

Although the direct 80C benefit is unavailable, the NPS is an excellent tool for building a retirement corpus while maintaining disciplined savings.

Summary of the 3 Options

Final Takeaways

• ELSS: Perfect for investors seeking high growth with a shorter lock-in.
• PPF: A safe, stable option for long-term savings.
• NPS: Ensures disciplined retirement planning with balanced returns.

These investments, despite the new tax regime, remain valuable tools for building a secure and profitable portfolio.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in securities market are subject to market risks, read all the related documents carefully before investing.