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Align tax-saving investments with financial goals and asset allocation

The article from Business Standard discusses the importance of aligning tax-saving investments with one's financial goals and asset allocation strategy. It highlights that while tax-saving instruments like the Public Provident Fund (PPF), National Pension System (NPS), and Equity-Linked Savings Schemes (ELSS) offer tax benefits under Section 80C of the Income Tax Act, investors should not solely focus on tax savings. Instead, they should consider how these investments fit into their broader financial plan. The piece advises that investments should be chosen based on risk tolerance, investment horizon, and liquidity needs, rather than just tax benefits. For instance, ELSS might be suitable for those with a higher risk appetite looking for equity exposure, while PPF could be ideal for those seeking safety and long-term savings. The article also warns against over-investing in tax-saving instruments at the cost of diversification, suggesting that a balanced approach considering both tax efficiency and financial goals will lead to better long-term wealth creation.

Read the Full Business Standard Article at [ https://www.business-standard.com/finance/personal-finance/align-tax-saving-investments-with-financial-goals-and-asset-allocation-124112801096_1.html ]