💰 ELSS Vs PPF 💰
Equity-linked savings scheme Vs Public Provident Fund
💰 What are ELSS?
ELSS are Equity Linked Savings Scheme which is nothing but a tax-saving provident fund. It provides both features of tax savings and long-term investment.
These funds invest primarily in equity and related instruments. These funds generally gave a return of nearly 12% or above depending on the market scenarios. Tax deduction can be availed under section 80 C.
💰 What is PPF?
Public Provident Fund, is a government-backed debt asset which is helpful for long-term financial goals. A Tax deduction of 1.5 lakhs can be availed under 80 C for PPF investment.
It has a locking period of 15 years with premature withdrawal available after 6 th year.
💰 Comparison
🧡Risk: PPFs are less risky as it is backed by the government of India. It is also a debt asset. While ELSS are equity linked hence come with a higher risk. As equity markets are more volatile.
🧡Returns: Current rate of interest in PPF is 7.1 % which is decided by the government of India. While the ELSS is having a higher return average of around 12%
🧡Tax Benefits: Both PPF and ELSS are used for tax saving up to Rs.1.5 lakhs under section 80 C. ELSS are associated with a long term capital gain of 10% after maturity of withdrawal.
🧡Lock-in period: PPF is having a lock-in period of 15 years with partial withdrawal after 5 years. While ELSS having a lock-in of 3 years.
🧡Investment limit: PPF is having investment range of min Rs.500 to max Rs.1.5 lakhs per year while ELSS is having min investment amount of Rs.500 with no upper limit.
Disclaimer: The information mentioned above is only for educational purposes. Kindly contact your financial advisor before trading/investing 💰
Please post your views/queries in the comments below. 👇
