No change in taxes: It is time to focus on post-tax returns

 

The much-awaited budget has come and gone without any tax changes, much to the disappointment of many. Given that a very small number of Indians pay tax and with all the changes done last year, any more concessions seemed unlikely. Now that the budget is done with, with the changing socio-economic environment, it is time to shift attention to financial future proofing. With every asset class showing volatility, the need of the hour is to check if one’s finances can withstand the variability in the markets.

Start with assessing the portfolio at an overall level to check if it is beating inflation. Investors tend to extrapolate equity returns to overall portfolio returns. A portfolio with 10% in equities and 90% in safe instruments like deposits & insurance schemes may yield 6-6.5% per annum, which means it is not beating inflation. Over tax savings, investments beating inflation needs to be prioritised to grow wealth to be able to meet life goals. With almost every asset class booming in the last couple of years, one might have picked up various instruments and with the fall now, it is a good time to assess whether the investments made have a place in the portfolio. For instance, if someone has recently invested in a silver ETF, the key question is whether it is a tactical allocation or part of their core portfolio. If it is a core investment, which financial goal should it be aligned with?

Volatile markets can actually be a good moment to reflect upon and exit impulse investments because volatility exposes whether the investment had a real purpose or was just a reaction. When markets are doing well, risk feels easier to take. When markets swing, that same risk can suddenly feel uncomfortable.

Markets are unpredictable but your behaviour and decisions don’t have to be. Instead of reacting to market noise, focus on controllable decisions like how much to invest, where and for how long. Build a goal based investment plan which balances risk and returns. Be mindful of returns expectations. Returns across asset classes have been strong in the recent years, but such performance should not be assumed as a norm. It is important to reset expectations closer to long-term averages.

The key focus in any investment should be on post-tax, post-expense returns and alignment with risk and goals. Often schemes are chosen based on tax deduction benefits without considering whether the actual returns earned post tax would be favourable or if they align with financial goals.

As uncertainty continues to be a defining feature of markets, ensuring your investment strategy is built for long-term resilience has never been more important.

The author is a financial educator, founder director of Finsafe India Pvt. Ltd and co-founder of Womantra

Published in Deccan Herald | By Mrin Agarwal

Date: February 09, 2026