ELSS vs PPF Calculator
Compare ELSS and Public Provident Fund using the same contribution schedule. Review post-tax value, liquidity, Section 80C benefit, risk and purchasing power.
Last Updated: July 23, 2026Compare ELSS and PPF Returns
Use an expected ELSS return, not a promised rate. PPF uses the entered government-notified rate for every future year.
Enter assumptions and select Compare ELSS and PPF.
| Year | Contribution | Cumulative invested | ELSS value | PPF value | ELSS redeemable |
|---|
| Scenario | ELSS return | ELSS post-tax | PPF value | Difference |
|---|
This is an assumption-based comparison. ELSS returns are market-linked and may be negative. PPF rates are reviewed by the Government and may change. The tool holds your entered rates constant only to create a comparable projection.
ELSS vs PPF: What This Calculator Compares
ELSS and Public Provident Fund are both eligible Section 80C investments under the old tax regime, but they solve different needs. An Equity Linked Savings Scheme invests mainly in equities. Its return depends on the market, fund portfolio, expenses and the date you redeem. PPF is a government-backed small-savings account with a notified interest rate and a 15-year initial term.
This calculator applies one contribution schedule to both options. It compares the projected ELSS value after estimated Section 112A tax with the tax-free PPF value. It also separates ELSS units that have completed their three-year lock-in from recent units that remain locked at the comparison date.
The result is a planning estimate, not a recommendation. A higher projected corpus does not make an option suitable for every investor. Your time horizon, need for capital protection, ability to tolerate equity declines and access to emergency savings matter.
How to Use the ELSS vs PPF Calculator
- Select annual or monthly contributions. Enter no more than ₹1.5 lakh per financial year because that is the PPF deposit ceiling.
- Select beginning or end of period. Earlier deposits normally receive more time to grow.
- Enter a horizon from 15 to 30 years and the number of years you plan to contribute.
- Enter a reasonable expected ELSS return. The figure should be after the fund's expense ratio.
- Enter the PPF rate. The default 7.1% is the current published rate, but future rates are not guaranteed to remain unchanged.
- Enter inflation to convert future amounts into today's purchasing power.
- Select your tax regime. Enter existing 80C claims and your marginal tax rate if you use the old regime.
- Enter any Section 112A annual exemption already consumed by other equity long-term gains in the expected redemption year.
- Select Compare ELSS and PPF. Review both the corpus and liquidity results before interpreting the winner.
ELSS and PPF Calculation Methods
ELSS Future Value
Each ELSS contribution is treated as a separate investment lot. Annual returns are converted to an effective monthly return, and every lot grows from its contribution date to the comparison date.
Future value of a contribution = Investment × (1 + monthly return)months invested
The calculator adds the future value of every lot. It then separates lots held for at least 36 months from lots still inside the statutory three-year lock-in.
PPF Future Value
PPF interest is credited annually. The model estimates monthly eligible balances and credits one year's interest at year-end. A contribution at the beginning of a period receives more eligible months than the same contribution at the end.
Estimated ELSS Tax
ELSS is an equity-oriented mutual fund. For a long-term redemption covered by Section 112A, aggregate annual LTCG above ₹1.25 lakh is taxed at 12.5%, plus applicable surcharge and 4% cess. This calculator applies 12.5% plus cess after reducing the entered remaining threshold. It does not model surcharge, grandfathering, loss set-off or basic-exemption adjustment.
Estimated ELSS tax = taxable LTCG × 12.5% × 1.04
PPF maturity tax = ₹0 under the current exempt-exempt-exempt treatment.
The notional ELSS post-tax value assumes every lot is eventually redeemed after completing its lock-in. The separate redeemable output shows how much of the projected corpus has completed 36 months at the selected horizon.
Worked ELSS vs PPF Example
Assume you invest ₹1.5 lakh at the beginning of every year for 15 years. ELSS is assumed to earn 12% annually. PPF is assumed to earn 7.1% throughout the projection. Inflation is 5%. You use the old tax regime, have no other 80C claim and fall in a 20% marginal slab.
The tool compounds every contribution separately. It estimates ELSS capital-gains tax after the ₹1.25 lakh annual Section 112A threshold and displays the PPF corpus as tax-free. It also flags the last ELSS contributions that have not completed their three-year lock-in by Year 15.
Your annual 80C deduction is limited to ₹1.5 lakh across all eligible claims. At a 20% marginal rate plus 4% cess, the maximum simplified annual tax-saving estimate is ₹31,200. Both ELSS and PPF create the same deduction when the same eligible amount is invested, so the tax saving does not determine the winner between them.
ELSS vs PPF Comparison
| Feature | ELSS | PPF |
|---|---|---|
| Return | Market-linked, not guaranteed | Government-notified rate |
| Risk | Equity market volatility and fund risk | Government-backed account |
| Lock-in or term | 3 years for each investment lot | 15-year initial account term |
| 80C eligibility | Up to combined ₹1.5 lakh limit in old regime | Up to combined ₹1.5 lakh limit in old regime |
| Tax on maturity | Equity capital-gains rules apply | Currently tax-free |
| Investment limit | No scheme-wide 80C investment cap | ₹500 minimum and ₹1.5 lakh maximum yearly |
| Liquidity | Redemption after each lot completes 3 years | Withdrawal and loan rules apply during term |
| Best fit | Long horizon and equity-risk capacity | Capital stability and long-term fixed-income allocation |
SEBI explains that ELSS investments are locked for three years and remain exposed to market performance. India Post lists PPF at 7.1% per annum, compounded yearly. Always recheck the prevailing PPF rate and the selected ELSS scheme document before investing.
How the Three-Year ELSS Lock-In Works
Every ELSS purchase receives its own three-year lock-in. A lump sum invested on one date unlocks together. A monthly SIP does not become fully liquid three years after the first installment. Each month's units unlock three years after their own allotment date.
This distinction matters when contributions continue until the end of your horizon. At the comparison date, recent ELSS lots may still be locked even though the older corpus is redeemable. The calculator reports both amounts. It does not treat locked value as cash available today.
A PPF account has a 15-year initial term. It may be extended in five-year blocks under applicable rules. Partial withdrawals and loans are governed by separate eligibility conditions. Do not compare the shortest lock-in alone. Compare when and how much money you expect to access.
Section 80C Tax Saving Under Old and New Regimes
The combined deduction under Sections 80C, 80CCC and 80CCD(1) is capped at ₹1.5 lakh. Existing EPF contributions, life-insurance premiums, eligible tuition fees, principal repayment and other claims reduce the room available for ELSS or PPF.
The calculator subtracts your other 80C claims from ₹1.5 lakh. It applies your entered marginal rate and 4% cess to estimate annual tax saving. This shortcut does not reproduce a complete income-tax return. Rebate, marginal relief, surcharge, special-rate income and deduction eligibility may change the actual amount.
The new tax regime does not provide the standard Section 80C deduction. If you select new regime, the calculator sets the estimated 80C saving to zero. You may still invest in ELSS or PPF for financial goals, but the contribution does not create this deduction.
How to Interpret the Break-Even ELSS Return
The break-even result is the assumed annual ELSS return needed for its estimated post-tax value to equal the PPF maturity value under the same schedule. A required rate close to the PPF rate reflects ELSS taxation and timing. A higher required rate means ELSS needs more market performance to offset tax and match the tax-free PPF result.
Break-even is not a forecast. Equity returns vary from year to year and do not arrive in a smooth line. Sequence, valuation, fund performance and redemption timing affect actual outcomes. Use the downside, base and upside scenarios to see how sensitive the result is to one return assumption.
When ELSS or PPF May Fit Your Plan
ELSS may fit when
- You have a long investment horizon beyond the minimum lock-in.
- You accept equity volatility and temporary losses.
- You want market-linked growth within your old-regime 80C allocation.
- You understand that each SIP installment has a separate lock-in.
PPF may fit when
- You prioritise government backing and tax-free compounding.
- You are comfortable with a 15-year account term.
- You want a stable fixed-income component for a long-term goal.
- You accept that the notified interest rate may change in future quarters.
You do not need to select only one. Some investors use PPF for stable debt allocation and ELSS for equity exposure. The right split depends on the rest of your portfolio, not the calculator winner alone.
Common Comparison Mistakes
- Using a guaranteed-looking ELSS return. Equity outcomes are uncertain.
- Assuming the current PPF rate will stay unchanged for 15 years.
- Applying the full ₹1.5 lakh deduction after EPF and other claims already use the limit.
- Claiming 80C benefit while using the new tax regime.
- Ignoring capital-gains tax when comparing maturity values.
- Treating every ELSS SIP unit as liquid three years after the SIP starts.
- Comparing nominal future rupees without checking inflation-adjusted value.
- Choosing only from return projections without assessing risk and liquidity.
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Frequently Asked Questions
Which is better, ELSS or PPF?
Neither is universally better. ELSS offers market-linked equity exposure with higher risk. PPF offers government backing, a notified rate and tax-free maturity. Choose based on risk, horizon, liquidity and portfolio allocation.
What PPF rate does this calculator use?
The default is 7.1% per annum, compounded yearly. The tool assumes the entered rate stays constant for projection, although the Government reviews small-savings rates periodically.
Is ELSS return guaranteed?
No. ELSS invests predominantly in equities. Returns depend on market and scheme performance and may be negative over some periods.
How long is the lock-in for an ELSS SIP?
Each SIP installment is locked for three years from its own allotment date. The complete SIP does not unlock three years after the first installment.
What is the PPF lock-in period?
PPF has a 15-year initial account term. Applicable rules provide limited loans, partial withdrawals and extension options, so it is not identical to a simple 15-year fixed deposit.
Do ELSS and PPF both qualify under Section 80C?
Yes, under the old tax regime, subject to eligibility and the combined ₹1.5 lakh limit across Sections 80C, 80CCC and 80CCD(1). The standard deduction is unavailable in the new regime.
Is PPF maturity taxable?
PPF contributions, interest and qualifying maturity proceeds currently receive exempt-exempt-exempt treatment. Tax rules may change, so verify them for the relevant year.
How is ELSS taxed on redemption?
Long-term gains from equity-oriented funds covered by Section 112A are taxed at 12.5% on aggregate annual gains above ₹1.25 lakh, plus applicable surcharge and cess, under current rules.
Can I invest in both ELSS and PPF?
Yes. Your combined Section 80C deduction remains capped at ₹1.5 lakh with other eligible claims. Holding both may combine equity growth potential with a stable long-term debt allocation.
Financial disclaimer: This calculator provides educational estimates, not investment, tax or financial advice. ELSS returns are not guaranteed. PPF rates and tax rules may change. Check current rules and consult a qualified adviser before acting.