Many taxpayers shifting to the new income tax regime are in a dilemma. Should they stop investing in traditional tax-saving options now that most deductions are gone? The answer is largely no.

While the new regime offers lower tax rates without exemptions, some long-standing investment tools still play an important role in protecting your money and building long-term wealth.

PPF

The Public Provident Fund remains one of the safest ways to build a retirement corpus. It still offers tax-free interest (currently 7.1% p.a.) and carries a sovereign guarantee.

The 15-year lock-in might seem restrictive, but it also pushes investors to remain disciplined. If retirement planning is your goal, continuing PPF makes sense.

NPS

Under the new regime, employee contributions no longer receive deductions. However, employer contributions (up to 14% of basic salary) continue to be deductible.

The NPS also offers a low-cost, diversified investment option for retirement.

HEALTH INSURANCE

With medical costs rising rapidly, one critical illness can wipe out years of savings. Health insurance protects you from such shocks.

Though the Section 80D deduction is an added benefit, what really matters is keeping your policy active to protect your portfolio.

TERM INSURANCE

A term plan is not an investment. It is a safety net for dependents in case of the breadwinner’s death. Even though Section 80C deductions don’t apply in the new regime, the real purpose is to shield dependants from financial shock. Dropping it only because it no longer offers tax savings can create serious risk. Continue it until your financial goals are fully secured.

ELSS

Equity remains key to long-term wealth building. However, without the Section 80C benefit, ELSS funds lose their main edge. Instead of locking money for three years, moving to diversified equity or index funds provides greater flexibility.

Simply put, even under the new income tax regime, some investments serve critical long-term goals beyond tax savings. Before discontinuing any product, look at its role in your portfolio, not just its tax benefit.