Neutral impactEconomy
Switched to the new income tax regime? Why these older tax-saving instruments still make sense
Times of India 1 hr ago·30 Sept 2026, 12:32 pm
The government’s recent shift to a new income‑tax regime, which offers lower slab rates but fewer deductions, has led many salaried taxpayers to rethink their savings strategy. While the new structure reduces reliance on traditional exemptions, long‑standing tools such as life‑insurance policies and the Public Provident Fund (PPF) remain widely used.
These instruments still matter because they blend tax relief with long‑term financial security. A life‑insurance cover provides a safety net for families and its cash value grows tax‑free, while PPF delivers a government‑backed, risk‑free return that compounds over a 15‑year horizon. Even though the nominal yield may trail equity markets, the guaranteed returns and safety help diversify a portfolio.
Investors should watch for any changes to PPF interest rates, revisions in the tax treatment of insurance premiums, and the overall trade‑off between tax savings and investment returns when shaping retirement or wealth‑creation plans.
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