New Tax Regime Does Not Offer Tax Deductions

Queries R. Chandrashekhar I started my first job a year back. Currently, my income falls in the tax bracket of 7.5 per cent. If I opt for the new tax regime, does it make sense to invest in the tax saving instruments and claim deduction or invest in equity to get returns higher than 7.5 per cent per annum? It is great to hear that you are starting to think about investing early in your career. Just because you are in the 7.5 per cent tax bracket, does not mean you should aim for a similar return on your investments. These are two separate things. There are many products that can be used for investment and tax saving. It is important to be clear about the purpose of the investment—is it for long-term wealth creation, short-term goals or to get insurance? Once you decide the purpose, select the appropriate instrument. If you are opting for the new tax regime, tax deductions will not...