I’m someone who is considering starting a PPF account just for its high returns (7%) and govt. backing but after knowing that its tax benefits are about to vanish in the new tax regime, I’m now puzzled whether to do it or not.
In the new regime, no deductions for investments like PPF are allowed under 80C. In this case, don’t you think PPF will be just like any other investment vehicle and won’t have any inherent advantage? Granted that FD interest rates are low right now but I can use that for short term and wait until they are high again to make a longer term investment, wouldn’t that make better sense than a 15 year lock-in investment which doesn’t even give tax benefit?
Of course, there is also the option of sticking to the old regime. But for how long can we do that? 15 years is a very long period, its totally possible that govt. might make the new regime mandatory after next 4-5 years?