ELSS vs PPF Calculator
ELSS and PPF (Public Provident Fund) are two of the most commonly compared Section 80C tax-saving options in India. Both give you the exact same upfront tax deduction on the same invested amount — the real differences lie in lock-in period, risk, and how each is taxed at maturity. Our ELSS vs PPF Calculator shows the shared tax saving, then compares how much each option could grow to over your chosen investment period.
Enter your annual 80C investment amount, ELSS’s expected annual return, PPF’s current interest rate, your time period, and your income tax slab rate. The calculator shows your tax saved (identical either way) and a side-by-side comparison of both options at maturity.
ELSS vs PPF Calculator Formula
Tax saved is calculated identically for both, since Section 80C treats every eligible instrument the same way:
Tax Saved Per Year = MIN( Annual Investment , ₹1,50,000 ) × Income Tax Slab Rate
The maturity value of each option uses the future value of an annuity formula, with annual contributions compounding at each instrument’s own rate:
Maturity Value = Annual Investment × [ ( (1 + r)^n − 1 ) / r ] × (1 + r)
- r = ELSS’s expected annual return, or PPF’s current government-declared interest rate
- n = Number of years you invest
PPF’s interest rate is set by the Ministry of Finance and reviewed every quarter, so it can change over your investment period even though it has stayed at 7.1% p.a. since April 2020. ELSS’s return, by contrast, is a market-linked assumption with no guarantee attached.
ELSS vs PPF: Key Differences
| Feature | ELSS | PPF |
|---|---|---|
| Lock-in Period | 3 years | 15 years |
| Returns | Market-linked (not guaranteed) | Government-declared, fixed for the quarter |
| Risk | Higher (equity market risk) | Very low (sovereign-backed) |
| Tax on Maturity | LTCG at 12.5% above ₹1,25,000/year | Fully tax-free (EEE status) |
| Annual Investment Limit | No upper limit (₹1.5L eligible for 80C) | ₹1,50,000 maximum per year |
Example Calculation
Suppose you invest the full ₹1,50,000 every year for 15 years (PPF’s standard lock-in period), comparing ELSS at an expected 12% annual return against PPF at its current rate of 7.1%, and you’re in the 30% tax slab.
- Annual 80C Investment: ₹1,50,000
- ELSS Expected Return: 12% | PPF Interest Rate: 7.1% (current rate as of 2026)
- Time Period: 15 years
- Income Tax Slab Rate: 30%
Tax Saved Per Year: ₹45,000 | Total Tax Saved over 15 years: ₹6,75,000 — identical either way.
| Metric | ELSS | PPF |
|---|---|---|
| Total Invested | ₹22,50,000 | ₹22,50,000 |
| Wealth Gained | ₹40,12,992 | ₹18,18,209 |
| Maturity Value | ₹62,62,992 | ₹40,68,209 |
Both options save the same ₹6,75,000 in tax over the 15 years. At maturity, ELSS is ahead by approximately ₹21,94,783 — but unlike the earlier example, PPF’s maturity value here is already tax-free (thanks to its EEE status), so it doesn’t need any further adjustment, whereas ELSS’s gain would still be subject to LTCG tax if redeemed. Also note ELSS technically only requires a 3-year lock-in, so this 15-year comparison assumes you choose to stay invested that long rather than being required to.
FAQs about ELSS vs PPF Calculator
Does ELSS or PPF save more tax?
Neither — both give you the identical Section 80C deduction for the same amount invested, up to ₹1,50,000 per year. The tax saved depends only on your investment amount and tax slab, not on which instrument you choose.
Why would someone choose PPF over ELSS despite the lower historical returns?
PPF is government-backed with a fixed, guaranteed rate and zero market risk, and its interest and maturity amount are completely tax-free under its EEE (Exempt-Exempt-Exempt) status. Many conservative investors, or those close to needing the money, prefer this certainty over ELSS’s higher but market-linked and non-guaranteed returns.
Is PPF’s maturity amount really tax-free?
Yes. PPF enjoys EEE tax status — the amount invested is deductible under Section 80C, the interest earned each year is tax-free, and the final maturity amount is also fully tax-free, with no LTCG or other tax applied, unlike ELSS.
Can the PPF interest rate change during my investment period?
Yes. The PPF interest rate is set by the Ministry of Finance and reviewed every quarter, so it can be revised up or down over a long investment horizon, even though it has remained steady at 7.1% p.a. since April 2020. This calculator assumes the rate you enter stays constant for the full period, which is a simplification.
Can I invest in both ELSS and PPF in the same year?
Yes, and many investors do exactly that. However, the combined ₹1,50,000 Section 80C deduction limit applies across both (and any other 80C investments) together — if you split ₹75,000 into each, you’d still only get a deduction on the combined ₹1,50,000, not double that amount.
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