• Send Query
  • Home
  • Accountant
  • Cash
  • Credit
  • Finance
  • Investment
  • Online Loan
  • Trading
Close
Leri Cash Advance Online Loan
Leri Cash Advance Online Loan
Close
  • Home
  • Accountant
  • Cash
  • Credit
  • Finance
  • Investment
  • Online Loan
  • Trading
ELSS vs PPF – Comparison of ELSS Funds with Public Provident Fund
Share:
Investment December 16, 2021 Tori Kody

ELSS vs PPF – Comparison of ELSS Funds with Public Provident Fund

If your yearly income is falling under one of the existing tax brackets and if this is your first time for tax declaration, it is natural for you to be a bit confused as to where to invest your money to bring down your tax liability. You may reach out to your parents or your close relatives who may suggest you invest in traditional investment instruments. Although it is fair on their part to advise you to invest in a conventional tax saving scheme, you need to also understand that a sharp fall in the interest rates will affect the overall performance of your investments.

So, the final question remains, should you invest in a conservative tax saving instrument like Public Provident Fund (PPF) or a tax saver fund like Equity Linked Savings Scheme (ELSS).

What is ELSS?

ELSS is a mutual fund scheme that comes with a three year lock-in period and tax benefit. Under Section 80C of the Indian Income Tax Act, 1961 a tax paying citizen can invest up to Rs. 1.5 lacs every fiscal year in ELSS and claim tax benefit on the invested sum.

What is PPF?

Public Provident Fund is a fixed interest offer traditional tax saving instrument. It has a minimum lock-in period of 15 years. PPF is a government back debt asset scheme that can be considered for targeting life’s long term financial goals like children’s education, retirement planning, etc.

Comparison between ELSS and PPF

Lock-in period

While ELSS has a short lock-in period of three years, Public Provident Fund locks your investment sum for a minimum period of 15 years. However, PPF gives the investor the option for making partial withdrawal after 5 years. A short lock-in period means ELSS offers more liquidity than PPF as investors can redeem their units or withdraw the entire investment sum after the lock-in period ends.

Time horizon

Public Provident Fund mandates the investor to invest for a minimum period of 15 years with the option of extending for 5 more years. However, ELSS does not have a time horizon and although it has a three year lock-in period, investors are not obliged to invest month after month in this tax saving scheme. They can invest at their own convenience.  

SIP option

PPF does not offer the option of SIP. However, you can invest in ELSS through SIP. Systematic Investment Plan (SIP) is an easy and effective way to save and invest a fixed sum regularly in the ELSS fund. Also, SIPs are flexible as investors can start or stop their SIP investment midway and do not have to pay any penalty for doing so. They can even choose to skip a month’s SIP investment and then invest as usual in the following month.

Risks

Since the Public Provident Fund is backed by the Government of India, the investment risk is very low. On the other hand, ELSS is a market linked scheme that predominantly invests in the equity market which is why they carry very high investment risk.

Returns

ELSS is a market linked mutual fund scheme that does not guarantee returns. On the other hand, PPF offers fixed interest on the sum invested. However, historically ELSS has outperformed all the traditional tax saving instruments in the long run.

Taxation

Returns from ELSS exceeding Rs 1lacs are taxed at a flat 10%. On the other hand, returns from all PFF investments are completely void of tax deductions.

To determine which tax saving instrument is ideal for your financial goals, do consult your financial advisor.

Previous post Converting ETH to BTC: Main Advice to Transfer Coins Safely
Converting ETH to BTC: Main Advice to Transfer Coins Safely
Next post SIP calculator: How to get ₹2 crores in 15 years using the 15 x 15 x 15 rule of mutual funds
SIP calculator: How to get ₹2 crores in 15 years using the 15 x 15 x 15 rule of mutual funds

Related Posts

Investment

Tips about how to Create a good investment Portfolio

November 13, 2020 Tori Kody
Money affects every aspect of the existence of individuals and as this is so – it’s that everybody should understand the concepts of...
Free Investment Accounts – Various Types Of Great, Free Investment Accounts!
Share:
Investment

Free Investment Accounts – Various Types Of Great, Free Investment Accounts!

July 24, 2019 Tori Kody
Contributing has customarily been one of the best just as prominent approaches to gain cash and to cause your cash to develop, regardless of...
Close
  • What Exactly Is An Accountant?
    What Exactly Is An Accountant?
  • Turning into an Accountant – Tips and Tricks
    Turning into an Accountant – Tips and Tricks
  • Enlisting Accountants – Biases In Accounting Service
    Enlisting Accountants – Biases In Accounting Service
  • Money Basis Versus Accrual Basis Accounting
    Money Basis Versus Accrual Basis Accounting

Archives

  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • September 2020
  • August 2020
  • June 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • Top 10 Tips to Improve Your Credit Rating Score
    Top 10 Tips to Improve Your Credit Rating Score
  • Credit Repair Information And Tips You Can Use
    Credit Repair Information And Tips You Can Use
  • All in all, You Want to Repair Your Credit Yourself?
    All in all, You Want to Repair Your Credit Yourself?
  • Should you Pay Credit Card Bill via EMI?
    Should you Pay Credit Card Bill via EMI?

Reviews from Author

  • Guide to Your Ideal Home Loan and Home Loan Tenure
    Online Loan
    Guide to Your Ideal Home Loan and Home Loan Tenure
    March 16, 2021
  • Bank business loan that you choose to go for
    Online Loan
    Bank business loan that you choose to go for
    January 14, 2020
  • A Guide to Online Loans
    Online Loan
    A Guide to Online Loans
    August 29, 2019

Recent Posts

  • Should I Invest A Lumpsum Amount In International Funds?
  • Essential Documents You Must Keep Ready Before Transferring Your Home Loan in India!
  • WHAT ARE THE WAYS IN WHICH A CREDIT COUNSELLOR CAN HELP YOU?
  • Understanding risk profile with examples and types
  • Should You Invest Your Surplus Money Or Prepay Your Home Loan?

Do not miss
How to Use a Cash Advance to Meet Unexpected Expenses
How to Use a Cash Advance to Meet Unexpected Expenses
March 25, 2022
Singa Credit for all kinds of Urgent Cash Needs
Singa Credit for all kinds of Urgent Cash Needs
October 18, 2019
Loan Credit Cards: You Should Know About These Costs
Loan Credit Cards: You Should Know About These Costs
May 6, 2019
The Cash Accounting Gap
The Cash Accounting Gap
April 27, 2019
Speedy Cash Advance
Speedy Cash Advance
April 21, 2019
Loan Loans – Take In the Good and Bad
Loan Loans – Take In the Good and Bad
April 18, 2019
Carry on with A Debt-Free Life With Bad Credit Cash Advance Loans
Carry on with A Debt-Free Life With Bad Credit Cash Advance Loans
April 13, 2019
Copyright © 2020 Leri Cash Advance Online Loan. All Rights Reserved.