It takes good financial planning on your part to make your savings meaningful and invest in schemes that give you the best results. The Government encourages individuals and households to invest and secure their financial futures by giving high tax rebates under Section 80C of the Income Tax Act. ELSS and FD are two of the many 80C investments you can make use of as an investor. This way, you can deduct Rs. 1.5 lakh from your taxable income and claim exemptions accordingly. Both come with its set of pros and cons and cater to investors of different investment profiles.
ELSS Vs PPF is a familiar debate in the investment world and let us explores that in detail here.
What is ELSS?
Equity Linked Saving Scheme (ELSS) is an open-ended equity mutual fund that offers investors the dual benefits of tax-saving and income growth.
What is PPF?
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.
PPF investment is a relatively safer option, but offers lower returns and longer time horizon as compared to ELSS. The tax benefits more in favour of PPF; however, ELSS certainly is an option for better returns (provided you have the appetite for market volatility). ELSS vs PPF – which one to choose, it depends ultimately on your personal preferences.