Key Takeaway
The best Section 80C investments ranked by returns: ELSS (12–15% but market-linked), PPF (7.1% tax-free, 15-year lock), NPS (market-linked + extra ₹50K deduction), and 5-year tax-saving FD (7% taxable).
Note: Under Section 80C, maximum deduction is capped at ₹1,50,000. NPS offers an extra ₹50,000 deduction under 80CCD(1B).
Maturity Comparison
Wealth Growth Projections
Key Parameters Comparison
| Parameter | ELSS | PPF | NPS |
|---|---|---|---|
| Lock-in Period | 3 Years (Shortest) | 15 Years | Till Age 60 |
| Historical Returns | 12% - 15% (Market-linked) | 7.1% (Guaranteed) | 9% - 11% (Market-linked) |
| Tax Treatment | EEE-ish (LTCG taxable at 12.5% over ₹1.25L) | EEE (100% Tax-Free) | EET (60% Lump sum tax-free, 40% taxable annuity) |
| Risk Factor | High (Equity risk) | Zero (Sovereign guarantee) | Moderate (Hybrid Equity/Debt) |
Advertisement
Frequently Asked Questions
Which is better , ELSS, PPF, or NPS for tax saving?
ELSS has the shortest lock-in (3 years) with highest return potential (12-15%). PPF is safest with guaranteed returns (7.1%) and a 15-year lock-in. NPS offers an extra ₹50,000 deduction but has withdrawal restrictions until age 60.
Can I invest in all three simultaneously?
Yes. Section 80C allows up to ₹1.5 Lakh across all instruments combined. NPS has an additional ₹50,000 under 80CCD(1B). You can split your ₹1.5 Lakh across ELSS, PPF, and EPF based on your risk appetite.
Are tax-saving investments useful in the New Tax Regime?
Most Section 80C deductions are NOT available in the New Regime. However, NPS employer contribution (up to 14% of basic) and the NPS 80CCD(2) deduction are still available. Evaluate which regime gives you a lower overall tax.
Get Smarter With Money Every Week
Join 10,000+ readers. One actionable money tip delivered free every Sunday.
Was this calculator helpful?
Advertisement