Comparisons
ELSS vs PPF: Tax Saving Comparison India
Compare lock-in, returns, risk, and tax treatment of India's two popular 80C options.
ELSS explained
Equity Linked Savings Scheme — mutual fund with 3-year lock-in. Qualifies for Section 80C. Market-linked returns; typical long-term equity CAGR 10–12% but not guaranteed. Lowest lock-in among 80C options.
PPF explained
15-year government scheme, ~7.1% interest (quarterly reset). EEE tax status. Partial withdrawal from year 7. Best for conservative investors wanting guaranteed tax-free corpus.
Risk-return tradeoff
| ELSS | PPF | |
|---|---|---|
| Lock-in | 3 years | 15 years |
| Risk | Market risk | Sovereign (low) |
| Expected return | 10–12% long-term | ~7.1% current |
| Liquidity after lock-in | Anytime redeem | Extend or withdraw rules |
Suggested split
Conservative: 100% PPF up to ₹1.5L. Moderate: ₹50K PPF + ₹1L ELSS SIP. Aggressive young investor: ₹1.5L ELSS via monthly SIP from April. Never choose ELSS if you might need money within 3 years.
Related tools
Frequently asked questions
Can I invest in both?
Yes, combined 80C limit is ₹1.5 lakh across all eligible instruments.
Which is safer?
PPF — government-backed fixed rate. ELSS is market-linked; can show negative returns over 3-year periods.
Which returns more?
ELSS historically higher over 7+ years due to equity exposure. PPF gives predictable 7–8% range.
Disclaimer: This guide is for educational purposes only. Not SEBI-registered investment advice. Consult a qualified advisor before making financial decisions.