If you're going to switch to the new tax regime, does it make sense to stop putting money in PPF, NPS, etc to simplify things?

[kw_pt1287]

@gash I have opened a ppf account but not put money in the last two years? Can I start now? Or is the account inactivated?

 

[jether]

@kw_pt1287 ACC is inactive but when you put money it will be active and 100 rs penalty will be deducted for 2 years. Go to your bank, they will do it.

 

[kw_pt1287]

@jether Thank you. Do I have to go to the bank? Can I just transfer the money to get it activated?

 

[jether]

@kw_pt1287 My bank requires to be there if acc is inoperative for kyc and all. Contact yout branch on phone they will tell you.

 

[joe2]

@eagleeyepro 500 is minimum and it is better to invest that b/w 1-4 april so that you get interest on it every month

 

[xxtroubledchristianxx]

@eluid If it fits in your asset allocation mix then it can stay.
For me ppf is a part of debt and im continuing it, others depending on circumstances.

 

[bigpaul]

@eluid Everything depends on asset allocation.

 

[fireheart]

@eluid Everyone is different. If you have the discipline to invest the same proportion of your salary in equity or debt as per your risk appetite. Unfortunately, most people don't have the required discipline.

 

[bluelephant]

@eluid These people in the comments are ignoring the fact that every time you put money into NPS they cut tax. So already cut tax when you invest and lock it till retirement .

You will only get 60% of the total corpus when you retire and the rest of it will be taxed as you get monthly pensions.

The whole tax exemption thing is only after you pay tax during investment and pay tax during redemption of your pension.

ELSS mutual funds give much better returns and gives tax benefits. Even if you consider LTCG taxes you will have a bigger amount to withdraw when you retire

 

[forevereternal]

@eluid You are stopping the good ones.
NPS is one of the best options for retirement.

 

[peterjohn]

@forevereternal Why not invest the same money directly in MFs instead of in NPS? Talking about the employee contribution here. Doing it in MFs doesn't come in with the lock ins and restrictions that you have in Tier 1

 

[sonofzion]

@peterjohn Because you don't have to pay income tax if you send your contributions in NPS upto a limit ?

 

[donovb1975]

@sonofzion Correct.

 

[elliot44]

@sonofzion Slight clarification.

Upto ₹ 50,000 tax deductible investment can be carried out by the person directly.

Anything above that needs the employer to "agree" to NPS deduction + remittance (as part of CTC) via employer+employee contrib to NPS.

Some employers offer the option of PF+ NPS within the agreed CTC which is great for tax saving.

 

[sonofzion]

@elliot44 Oh didn't know that not all employers offer this, I've only worked for large mnc and have seen the option to contribute to NPS. I can't understand why employer won't give the option, it's not like they have to shell out the contributions from their pocket.

 

[sean4567]

@eluid Keeping your PPF NPS account active by contributing a miniscule amount is better than closing them all together.

 

[nol]

@eluid PPF (15y/7 yr rollover), NPS (upto 60 and compulsory annuity) and PF are locked in.

PF can at least be extracted on unemployment.

ULIP is a no-no. Check the surrender value/costs and it may be better to surrender.

 

[joe2]

@eluid EPF and PPF are still considered as very good investments. EPF is generally much more relaxed and the interest rate is always more than 8%. It is generally easy to withdraw (despite the bad news recently).

PPF is a bit more tight but it is an EEE investment. Despite the 15 years lock in, it is one of the best investments for a long term.

If you are interested in shorter duration based on your life, MFs are a good way provided you stay for atleast for 3 years.

 

[theloverofgod]

@eluid Ppf and NPS if you are taking as tax saving then no, but they are retirement plans.

Help you allot

Apart from my EPS, NPS, PPF, I have invest monthly 4k in Mutual fund(for retirement small, mid, and flix cab)

This Fund is separate from other mutual funds which put for other purposes.

 

[joe2]

@eluid Talk to your employer. If they have an option to invest in NPS (emplyer contribution with no obligation by employee to match it), then you must take it .

it will reduce your tax liability as well and your money will grow.

Just for a comparison, the XIRR for last FY in equity (70%) in NPS is over 20%. No other investment could have returned this much