Hello, i am confused between PPF and ELSS. Is PPF better than ELSS for tax saving?
Let me help you with your question.
What to choose PPF or ELSS for Tax Saving
Well it really depends on what you are looking for. Even i was also confused about this when I started saving. If we talk about PPF then it is very safe and also gives fixed returns, the money is completely tax-free at maturity. But it has a long lock-in of 15 years.
And if we talk about ELSS, it is linked to the stock market, so it can give higher returns but it comes with some risk. It also has a shorter lock-in of 3 years, which is helpful if you want access to your money sooner.
PPF vs ELSS for Tax Saving
| Feature | PPF (Public Provident Fund) | ELSS (Equity Linked Savings Scheme) |
|---|---|---|
| Safety | Very safe (Govt-backed) | High risk (market-linked) |
| Returns | ~7–8% (fixed) | ~10–15% (market dependent) |
| Lock-in | 15 years | 3 years |
| Tax Treatment | EEE (fully tax-free) | LTCG: 10% on gains above Rs. 1 lakh |
| Liquidity | Very low (long lock-in) | High (withdraw after 3 years) |
| Best For | Safe investors, long-term saving | Risk-takers, wealth creation + tax saving |
So, if you are someone who wants safety and guaranteed returns, PPF is better choice. If you are okay with some risk and want a bit higher growth, ELSS can be a good choice.
https://finanjo.com/tools/ppf-calculator