Retirement objectives are incomplete without a sound and simple savings strategy. To reap the benefits in future, you need to discover the best savings options from a basket of opportunities. PPF (Public Provident Fund) and ELSS are tax saving schemes, which help you redeem a lump sum at the end of your work life.
Equity Linked Saving Scheme (ELSS) comes under the category of mutual funds, while the Public Provident Fund (PPF) is a government initiative which can substantially guarantee post retirement. PPF is similar to an ELSS scheme, wherein both have tax deduction under Section 80C of the Income Tax Act, 1961.
Returns of ELSS have been found to be higher than PPF due to the former’s direct linkage with stock markets. PPF is for risk-averse, long-term investors, while an ELSS best suits a short-term, risk-seeker. Returns of up to Rs 1.5 Lakh are tax exempt in both the cases. However, a long term capital gains tax of 10% over Rs 1.5 Lakh is charged in equity linked scheme.
PPF, a risk-free investment, unlike ELSS, has an annual rate of 8% currently. The lock-in period is 15 years, and in the case of ELSS, it is just 3 years. However, a lesser lock-in period does not guarantee you returns.
You should save today to secure your post-retirement life. Branch out your earnings and make sure you have enough options at your disposal. Of late, many plans have been rolled out, and you should track which saving schemes in India to invest in for the best returns while considering your financial trajectory.
Read More about which is the Best savings Options to Choose from Between ELSS and PPF here.
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