ELSS V/S PPF

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Elss v/s ppf
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Introduction

• Equity Linked Saving Scheme (ELSS) is an
  open-ended equity mutual fund that offers
  investors the dual benefits of tax-saving and
  income growth.
• These open-ended mutual funds invest primarily in
  the stock market. This type of mutual fund has a
  lock in period of 3 years from the date of
  investment.
• Public Provident Fund (PPF) scheme was introduced
  in India in 1968 to mobilize small savings. The
  scheme offers an investment avenue with decent
  returns coupled with income tax benefits.
• A PPF account can be opened with a Post Office or
  with specific banks.

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Difference between elss PPF
  ELSS PPF
Risks Being an equity fund, the investments are subject to market risks.   Backed by the Government of India hence safe
Returns Usually between 7 and 8 per annum compounded annually.   Returns can vary but are generally between 10-15 per annum.
Tax Benefits The invested amount in PPF is exempt from taxes at the time of investment, accumulation, and withdrawal 10 LTCG tax applicable on the profit over and above Rs. 1,00,000 (since minimum investment period is 3 years).    
Lock- In Period PPF Investment is locked in for a period of 15 years (after the 5th year partial withdrawals are permitted).   ELSS investments have a lock-in period of 3 years with no possibility of premature withdrawal  
Investment Limit Anything between Rs. 500 and Rs. 1,50,000 can be invested in a financial year, in PPF. There is no upper limit on investments in ELSS. However, under Sec 80C of the Act, only Rs. 1,50,000 is allowed as a tax deduction.
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Conclusion

• From the table above, it can be seen that a PPF
  investment is relatively safer option but, offers
  lower returns and longer time horizon as compared
  to ELSS. The tax benefits are more in favour of
  PPF, however, ELSS certainly is an option for
  better returns (provided you have the appetite
  for market volatility).
• Now the ultimate choice depends on you, your
  risk-taking ability, your time horizon and your
  long-term plan for wealth creation. Make the
  choice now!

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