ELSS vs PPF — which is better?

ELSS: shorter lock-in (3yr), higher expected return (12-14%), but market risk. PPF: longer lock-in (15yr), guaranteed 7.1%, no market risk, tax-free returns. Rule of thumb: young investors (30 yr horizon) favor ELSS for growth; conservative or older investors favor PPF for stability. Ideally hold both.

Can I claim 80C on ELSS in the new tax regime?

No — the new tax regime (default from FY 2023-24) does NOT allow Section 80C deduction. If you invest in ELSS while under the new regime, you get no tax benefit — only market returns. To claim 80C, opt for the old regime (via employer at start of year or Form 10-IEA for business income).

What about tax on ELSS gains?

Long-term (post 3-year lock-in) gains up to ₹1.25 lakh/year are TAX-EXEMPT under Section 112A. Gains above ₹1.25L taxed at 12.5% LTCG rate + 4% cess. Since ELSS has forced 3-yr lock-in, all gains are automatically LTCG — no STCG risk.

ELSS vs PPF — which is better?

ELSS: shorter lock-in (3yr), higher expected return (12-14%), but market risk. PPF: longer lock-in (15yr), guaranteed 7.1%, no market risk, tax-free returns. Rule of thumb: young investors (30 yr horizon) favor ELSS for growth; conservative or older investors favor PPF for stability. Ideally hold both.

Can I claim 80C on ELSS in the new tax regime?

No — the new tax regime (default from FY 2023-24) does NOT allow Section 80C deduction. If you invest in ELSS while under the new regime, you get no tax benefit — only market returns. To claim 80C, opt for the old regime (via employer at start of year or Form 10-IEA for business income).

What about tax on ELSS gains?

Long-term (post 3-year lock-in) gains up to ₹1.25 lakh/year are TAX-EXEMPT under Section 112A. Gains above ₹1.25L taxed at 12.5% LTCG rate + 4% cess. Since ELSS has forced 3-yr lock-in, all gains are automatically LTCG — no STCG risk.

ELSS Calculator

Equity Linked Savings Scheme — India's tax-saving mutual fund with shortest 3-year lock-in among Section 80C options.

Result

Corpus after tax

₹2,737,937

Total invested₹1,500,000
Gross corpus (before tax)₹2,904,238
Capital gain₹1,404,238
LTCG tax @ 12.5% (post ₹1.25L exemption)−₹166,301
80C tax saved (over holding period)30% slab × ₹150,000/yr × 10 yr₹450,000
Effective net wealthCorpus + tax saved over holding period₹3,187,937

Personal-finance essentials

Amazon affiliate

The Total Money Makeover

Dave Ramsey - the classic

Shop on Amazon

I Will Teach You to Be Rich

Ramit Sethi - modern practical guide

Shop on Amazon

The Psychology of Money

Morgan Housel - behavior over strategy

Shop on Amazon

As an Amazon Associate we may earn from qualifying purchases. This does not add cost for you.

How to use this calculator

Choose SIP (monthly) or lump-sum mode.
Enter monthly SIP or lump-sum amount.
Enter expected annual return (12% is category average).
Enter horizon (min 3 years due to lock-in).
Choose your tax slab for accurate 80C benefit calculation.
Read net-of-tax corpus + total 80C tax saved.

About this tool

ELSS (Equity Linked Savings Scheme) is India's only mutual fund category eligible for Section 80C tax deduction — up to ₹1,50,000/year deduction reduces your taxable income. Lock-in is just 3 years, the shortest among 80C options (PPF 15 yrs, EPF till retirement, NSC 5 yrs). Being equity-based, historical returns average 12-14% CAGR long-term, though with volatility. Gains above ₹1.25 lakh/year are taxed as LTCG at 12.5% (post-July 2024 rules). Available only under the OLD tax regime — the new regime (default from FY 2023-24) does NOT allow 80C deduction.

Frequently asked

3 years from each investment date. For SIPs, EACH monthly instalment has its own 3-year lock-in — so a January 2026 SIP unlocks January 2029, February 2026 unlocks February 2029, and so on. This is shorter than any other 80C option.

Related calculators

PPF Calculator

Public Provident Fund maturity value — annual contribution, interest rate (Government of India), 15-year lock-in.

LTCG Tax Calculator (India)

Long-Term Capital Gains tax under Section 112A/112 — equity, mutual funds, property. Uses post-July 2024 India rules (12.5% for equity, 20% with indexation for property).

Embed this tool on your site

Free, mobile-responsive iframe. Copy-paste a one-line snippet.

Get embed code →

More tools you might like

Hand-picked tools that pair well with this one — same audience, same intent.

PPF Calculator

Finance

Public Provident Fund maturity value — annual contribution, interest rate (Government of India), 15-year lock-in.

LTCG Tax Calculator (India)

Finance

Long-Term Capital Gains tax under Section 112A/112 — equity, mutual funds, property. Uses post-July 2024 India rules (12.5% for equity, 20% with indexation for property).

Sukanya Samriddhi Yojana Calculator

Finance

SSY maturity for a girl child — Government of India scheme, 21-year lock-in, current 8.2% p.a., triple tax-exempt (EEE).

NSC Calculator (National Savings Certificate)

Finance

NSC maturity value — Government of India 5-year scheme, current 7.7% p.a. compounded annually, Section 80C benefit on principal.

Senior Citizen Savings Scheme (SCSS) Calculator

Finance

SCSS — 60+ years pension scheme, current 8.2% p.a., quarterly interest, ₹30L cap, 5-year tenure. Section 80C benefit.

FMP Calculator (Fixed Maturity Plan)

Finance

Fixed Maturity Plan (closed-end debt mutual fund) — 3-year lock-in, gains taxed at slab (post-April-2023 rule). Alternative to bank FD for corporate investors + higher tax slabs.

Post Office MIS Calculator

Finance

Post Office Monthly Income Scheme — 5-year fixed deposit paying monthly interest. Government-backed, currently 7.4% p.a. Max ₹9L single / ₹15L joint.

Year-End Annual Appeal Letter

Docs

Year-end giving appeal letter — December tax-deadline focus, year-in-review storytelling, specific goal.

Long-form editorial covering the topics behind our tools.