Because of these beliefs, crores of salaried Indians in the 30% tax bracket continue to invest post-tax money into mutual funds, while leaving behind one of the strongest combinations of tax advantage and forced long-term discipline available to them in 2025–26.
“The hidden truth nobody talks about: For anyone in the highest tax bracket with employer offers corporate NPS, the pre-tax contribution alone puts 43–45% more capital to work from day one. Add ultra-low costs, partial tax-free withdrawal and forced long-term behaviour, and the same 10–12% gross return in NPS creates higher retirement wealth than an equity mutual fund,” said Rajani Tandale, Senior Vice President, Mutual Fund at 1 Finance.