Are you optimising for tax rules that may not apply to you?
Ask yourself: Are you investing in ELSS for the 80C deduction — and are you on the new tax regime? If so, you're locking up money for three years for zero tax benefit.
Note: Tax rules change with each budget. This covers FY2025-26 rules. Verify current rates before acting.
The 2025 Union Budget made a significant change that most investors haven't fully absorbed: salaried employees earning up to ₹12.75 lakh pay zero income tax under the new regime (₹12 lakh rebate + ₹75,000 standard deduction). For this group, traditional "tax planning" — ELSS, 80C, 80D — is irrelevant. The tax is already zero.
New regime slabs (FY2025-26):
| Income | Rate |
|---|---|
| Up to ₹4 lakh | 0% |
| ₹4–8 lakh | 5% |
| ₹8–12 lakh | 10% |
| ₹12–16 lakh | 15% |
| ₹16–20 lakh | 20% |
| ₹20–24 lakh | 25% |
| Above ₹24 lakh | 30% |
Under the new regime, Section 80C, 80D, HRA, and LTA deductions are not available. For most investors earning ₹7–12 lakh, those deductions were their only reason to invest in ELSS or PPF. That reason is now gone.
Who still benefits from active tax planning:
- High earners (> ₹20 lakh) — 30% slab where every legitimate deduction and tax-efficient vehicle compounds meaningfully
- Investors with large deductions (high HRA, active home loan, both 80C + 80D) who may still save more under the old regime
- Anyone with significant capital gains — capital gains tax applies regardless of which regime you're in
→ Check: Ratio Analysis — Financial Planner — if your savings rate analysis shows you're over-allocating to locked-in 80C instruments, consider whether those lock-ins still make sense under your current tax regime.