SIP in national defence fund? Experts urge investors to contribute in wake of Operation Sindoor

Although Systematic Investment Plans (SIPs) are known for helping individuals build wealth through equities or mutual funds, there are some funds that serve a higher purpose. Gurmeet Chadha, managing partner and chief investment officer at wealth advisory firm Compcircle, recently advocated on social media platform X for a different kind of SIP.

Rather than focusing on stocks, mutual funds, or financial returns, he urged Indians and investors to consider contributing to the National Defence Fund (NDF). Chadha emphasized the importance of national security over personal wealth, especially in light of the escalating conflict between India and Pakistan.

Similarly, Akshat Shrivastava, founder of Wisdom Hatch, highlighted on X the significance of prioritizing national welfare over personal financial interests during times of crisis. He encouraged individuals to support the National Defence Fund (NDF) as a means of aiding the welfare of defence personnel and their families. By making a contribution to the NDF, individuals can play a role in safeguarding the nation's security and supporting those who protect it.

What is National Defence Fund?

The National Defence Fund (NDF) was set up in 1962 with the aim of mobilising public contributions to support the welfare of members of the armed forces, paramilitary forces, and their dependents. Managed directly by the Prime Minister’s Office, the NDF extends financial support to the families of soldiers who have laid down their lives in the line of duty or been injured during operations.

One of the key characteristics that make the National Defence Fund unique is that it does not receive any direct funding from the government’s central budget. Unlike other government initiatives that rely on public funds, the NDF relies entirely on the goodwill and generosity of citizens and organizations who choose to donate. This makes it a crowd-sourced initiative, with the people of India contributing directly to the welfare of the nation’s protectors.

Tax savings

Donating to the NDF is not just an act of patriotism; it is also a financially efficient one. Donations made to the NDF are eligible for a full tax exemption under Section 80(G) of the Income Tax Act, meaning contributors can benefit from a reduction in their taxable income while supporting a vital cause. This makes it easier for people to contribute generously, knowing that they are also benefitting from a tax-saving opportunity.

Through its transparent and non-governmental structure, the NDF ensures that the funds received are used judiciously for the welfare of our forces, making it a trusted avenue for patriotic contributions. Over the decades, the NDF has supported countless soldiers and their families, helping them recover from the consequences of their service and ensuring that the sacrifices of India’s heroes are honored and remembered.