ELSS vs PPF vs NPS vs Sukanya Samriddhi: Which 80C investments still make sense in the new regime?

The new tax regime has changed the way investors need to look at several investments that were traditionally used to save tax under Section 80C. Since the new regime does not offer the 80C deduction, simply choosing an investment because it helped reduce taxable income may no longer make sense.

That does not mean ELSS, PPF, NPS or Sukanya Samriddhi have lost their relevance. The reason for investing in them has shifted. Instead of looking at them only as tax-saving products, investors should consider their returns, risk, liquidity and, most importantly, the financial goal they are meant to serve.

ELSS can make sense for investors looking to create wealth over the long term and who are comfortable with market-linked returns. However, under the new regime, its tax-saving benefit under Section 80C is not available.

“In short, these investments still make sense, but not because they save tax under Section 80C. Choose them based on your investment goals and risk appetite,” said CA Abhishek Soni, CEO & Co-founder, Tax2win.

What changes under the Income-tax Act, 2025?

There is also a change in the way the familiar Section 80C provision is numbered under the new Income-tax Act, 2025.

The erstwhile Section 80C of the Income-tax Act, 1961 has been renumbered and consolidated into Section 123 read with Schedule XV. The new provision continues to provide an aggregate deduction of up to ₹1.5 lakh in a tax year for eligible investments and payments.

However, this deduction is available only under the old tax regime, and not under the new default regime under Section 202.

• Life insurance premiums for self, spouse or children, and specified HUF payments

• PPF and EPF, recognised provident funds and approved superannuation funds

• ELSS and other notified mutual fund units

• National Savings Certificates and other notified savings certificates

• Five-year tax-saving fixed deposits with scheduled banks and five-year Post Office Time Deposits

• Sukanya Samriddhi Account and Senior Citizen Savings Scheme deposits

• ULIPs and notified annuity or pension plans

• Tuition fees for full-time education of up to two children in India

• Repayment of principal on a home loan for purchase or construction of a residential house

• Notified NABARD bonds and specified housing-finance deposit schemes

An additional deduction for contributions to the Central Government pension scheme (NPS) is available separately under Section 124, corresponding to the erstwhile Section 80CCD, and is in addition to the ₹1.5 lakh limit under Section 123.

Key takeaway for investors

If an investment fits your goal, risk appetite and time horizon, it can still have a place in your portfolio, even when there is no 80C tax deduction attached to it.