Abstract In 2024, the Finance Minister of Union Cabinet of India introduced a new Tariff for Income tax keeping the earlier scheme alive and the tax payers can choose according to the interest. But, once the new scheme is selected, it not possible to revert to first one. The big difference between these two are, in the slab width and provision for investment as per 80C to save tax. The choice depends on whether the tax payee have saving to invest in 80C investments. If it is no, the new regime is appropriate if the income is less than Rs 12L. But, from the perception of promoting saving and investment habit and boost financial stability in life, it is essential to promote investment. This paper justify the need of 80C based investments taking Net asset Value (NAV) as tool to compare the effect of inflation as well on tax saving funds. It is observed that the inflation effect is partially reduced due to the tax saving compared to the generic Fixed deposits. Lack of full awareness and predictability of the investment opportunity makes the use of NAV difficult to compare the investment opportunities. JEL: D14, E39, E40.
R et al. (Wed,) studied this question.
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