India’s tax world is buzzing with changes! The New Tax Regime, rolled out on April 1, 2025, has shaken things up for taxpayers. If you’ve been saving taxes with the Old Tax Regime through schemes like Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), and National Pension System (NPS), you’re probably wondering—what now? The new system scraps popular deductions like Section 80C and 80D, leaving many confused. Should you stick with these investments, or ditch them? Experts have some surprising answers! Let’s break it down in simple terms and see why these schemes might still be golden, even without tax perks.
Understanding the New Tax Regime: What’s Changed in 2025?
The New Tax Regime is all about simplicity—lower tax rates, but no deductions. Here’s how the tax slabs look as of April 1, 2025:
- Up to Rs.4 lakh: No tax—zero worries!
- Rs.4 lakh to Rs.8 lakh: 5% tax—easy on the pocket.
- Rs.8 lakh to Rs.12 lakh: 10% tax—still light.
- Rs.12 lakh to Rs.16 lakh: 15% tax—starts to pinch a bit.
- Rs.16 lakh to Rs.20 lakh: 20% tax—getting heavier.
- Rs.20 lakh to Rs.24 lakh: 25% tax—big chunk!
- Above Rs.24 lakh: 30% tax—top rate.
Compare that to the Old Tax Regime:
- Up to Rs.2.5 lakh: No tax.
- Rs.2.5 lakh to Rs.5 lakh: 5% tax.
- Rs.5 lakh to Rs.10 lakh: 20% tax.
- Above Rs.10 lakh: 30% tax.
The old system gave you tax cuts—like Rs.1.5 lakh off under Section 80C for PPF, SSY, or NPS, plus health insurance (80D) and home loan interest (Section 24). The new one? None of that! But here’s the twist—you can switch between old and new every year if you’re salaried with no business income, says SR Patnaik, a tax expert from Cyril Amarchand Mangaldas. So, flexibility’s there—but does it make sense to keep investing without tax breaks?
Why the Old Tax Regime Was a Savings Booster
Under the old system, you could save big by investing smartly. Here’s what you got:
- Section 80C: Up to Rs.1.5 lakh off for PPF, SSY, NPS, LIC premiums, or ELSS funds.
- Section 80D: Tax break on health insurance—Rs.25,000 for you, Rs.50,000 for senior citizen parents.
- Section 24(b): Up to Rs.2 lakh off on home loan interest.
- Extras: House Rent Allowance (HRA) and Leave Travel Allowance (LTA) perks.
These cuts made schemes like PPF, SSY, and NPS super popular. You’d save tax and grow money! But now, with the New Tax Regime wiping out these benefits, many wonder if these investments still shine. Let’s hear from the experts and dig into each one!
Public Provident Fund (PPF): Still a Safe Bet in 2025?
PPF’s been a crowd favorite forever—safe, steady, and government-backed. In 2025, it offers 7.1% interest per year. Sure, the New Tax Regime kills the Rs.1.5 lakh 80C deduction, but experts say don’t dump it yet! Shefali Mundra, a tax pro from ClearTax, explains, “PPF’s not just about tax savings—it’s about secure, long-term growth.”
Here’s why PPF still rocks:
- Tax-Free Returns: Interest and maturity amount are 100% tax-free—unlike bank FDs where you pay tax on interest.
- Flexibility: From year 3, you can borrow against it; from year 7, take out some cash.
- Long-Term Power: Lock-in is 15 years, but your money compounds safely. Invest Rs.1.5 lakh yearly, and in 15 years, you could have Rs.40-45 lakh—tax-free!
Mundra adds, “Even without deductions, PPF’s a solid pick for risk-free savings.” So, if you’re in the new regime and want stability, PPF’s still got your back!
Sukanya Samriddhi Yojana (SSY): A Girl Child’s Best Friend?
SSY is a superstar for parents with daughters. In 2025, it pays a juicy 8.2% interest—higher than PPF! It’s built to fund a girl’s education or marriage, but does it make sense without tax breaks? Experts say yes!
Why SSY stays awesome:
- High Returns: 8.2% beats most safe options like bank FDs (6-7%).
- Tax-Free Gains: Like PPF, interest and maturity are tax-free. Invest Rs.1.5 lakh yearly for 15 years, and by age 21, your daughter could get Rs.65-70 lakh!
- Discipline: You invest till the girl’s 15, then it grows till 21—perfect for big goals.
“SSY’s a gem for parents, deduction or not,” says Mundra. “It’s secure and grows big for your girl’s future.” New regime or not, if you’ve got a daughter under 10, SSY’s a no-brainer!
National Pension System (NPS): Retirement Ready in 2025?
NPS is your retirement buddy—a mix of equity and debt to build a pension pot. The New Tax Regime scraps its 80C and 80CCD(1B) deductions (up to Rs.2 lakh total), but it’s still got perks!
Here’s why NPS shines:
- Tax-Free Chunk: At retirement (age 60), 60% of your corpus is tax-free—only 40% gets taxed when you buy an annuity.
- Market Growth: You pick equity, bonds, or both—higher returns than PPF or SSY over decades.
- Low Cost: NPS fees are tiny, so more money grows for you.
Patnaik notes, “NPS keeps building wealth, even without tax cuts.” Say you put in Rs.50,000 yearly from age 30. By 60, with 8-10% returns, you could have Rs.50-60 lakh—60% tax-free! New regime or not, NPS is a retirement winner.
Expert Opinions: Beyond Tax Breaks, It’s About Goals
Experts agree—don’t judge PPF, SSY, and NPS just by tax savings. “Investing’s about financial freedom, not just tax tricks,” Mundra stresses. “These schemes give safety, growth, and discipline—benefits that last a lifetime.”
- PPF: Perfect for anyone wanting a safe, tax-free nest egg.
- SSY: A must for parents securing a girl’s future.
- NPS: Ideal for retirement dreamers who like some market spice.
Patnaik adds, “Switching regimes yearly lets you test what works. If the new slabs save you more tax than deductions, go for it—but don’t ditch these investments.”
Old vs New: A Quick Money Check for 2025
Let’s see how it plays out:
- Salary Rs.10 lakh (Old Regime):
- Tax: Rs.1.12 lakh (after Rs.1.5 lakh 80C + Rs.50,000 standard deduction).
- Net: Rs.8.88 lakh.
- New Regime:
- Tax: Rs.70,000 (no deductions).
- Net: Rs.9.3 lakh—Rs.42,000 more!
New regime wins here, but you miss investing Rs.1.5 lakh. Over 15 years, that Rs.1.5 lakh in PPF could grow to Rs.40 lakh—tax-free. Short-term savings vs long-term wealth—your call!
Hidden Perks of Sticking with PPF, SSY, and NPS
Even without deductions, these schemes pack extras:
- Government Backing: No risk of losing money—safe as houses!
- Beats Inflation: 7.1% (PPF), 8.2% (SSY), and 8-12% (NPS) outrun bank savings (3-4%).
- Peace of Mind: Lock-ins force you to save—no splurging!
Mundra says, “Think beyond tax—think security and growth.” In 2025, with prices climbing, these returns keep your money strong.
Risks of Quitting: Don’t Trip Over Penalties
Ditching these mid-way? Watch out!
- PPF: Skip a year, pay Rs.50 penalty per missed year + Rs.500 minimum to reactivate.
- SSY: Miss Rs.250 yearly, account freezes—revive it with Rs.50 fine per year.
- NPS: No penalty, but less in means a smaller pension.
“Keep them active,” advises Patnaik. “Even small amounts keep the benefits alive.”
How to Decide: Tips for 2025 Taxpayers
- Low Income (Under Rs.12 lakh): New regime saves tax—invest small in PPF/SSY for growth.
- High Income (Above Rs.16 lakh): Old regime’s deductions might beat new slabs—stick with investments.
- Retirement Focus: NPS is your go-to, new or old regime.
- Girl Child: SSY’s a no-brainer—start it!
“Match your goals,” Mundra suggests. “Tax is just one piece—wealth’s the big picture.”
Why 2025’s the Year to Rethink Your Money Moves
The New Tax Regime’s here to stay, and it’s tempting with lower rates. But PPF, SSY, and NPS aren’t just tax tools—they’re wealth builders! In 2025, as jobs shift and costs rise, experts say these schemes keep you ahead—safe returns, tax-free gains, and a secure future. Whether you switch regimes or not, don’t sleep on these—your money deserves to grow!
