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PPF vs ELSS vs NPS, on the same ₹1.5 lakh a year

All three are common ways to use the Section 123 (old 80C) limit, but they work very differently. This page puts the same yearly amount through each one and shows the result after tax, using rules you can check.

	Value at the end	Tax when you take it out	In your hands
PPFGovernment-set rate	₹40.68 lakh	None (tax-free)	₹40.68 lakh
ELSSMarket-linked	₹62.63 lakh	₹4.86 lakh	₹57.77 lakh
NPSMarket-linked	₹52.42 lakh	Extra lump sum and pension at slab	₹31.45 lakhtax-free, plus a pension

How they differ

	PPF	ELSS	NPS
Return	Set by the government each quarter; 7.1% now	Market-linked (equity mutual fund)	Market-linked (equity and bonds)
Lock-in	15 years; partial withdrawal from year 7	3 years for each instalment	Until 60, or 15 years in the scheme
Tax deduction	Section 123 (old 80C), old regime	Section 123 (old 80C), old regime	Section 123 (old 80C) plus ₹50,000 under Section 124 (old 80CCD(1B)), old regime; employer's share under Section 124 (old 80CCD(2)) in both
Tax when you withdraw	None	12.5% on long-term gains above ₹1.25 lakh a year	60% of corpus tax-free; extra lump sum and pension taxed at slab
Yearly limit	₹1.5 lakh	None	None

The same ₹1.5 lakh a year for 15 years

Deposited at the start of each year: PPF at 7.1% grows to ₹40,68,209, all of it tax-free. ELSS at an assumed 12% grows to about ₹62.63 lakh; redeeming it all in one year would mean about ₹4.86 lakh in tax. NPS at an assumed 10% grows to about ₹52.42 lakh, of which 60% can be taken tax-free and the rest is either taxed or used for a pension.

The gap between them comes almost entirely from the return assumption. PPF's 7.1% is declared; the 12% and 10% are planning figures that may or may not be met. Change them in the calculator above to see where the results cross.

What the calculator does not decide

It does not tell you which to choose. The right mix depends on when you need the money, how much a fall in markets would worry you, which tax regime you are in, and what else you hold. Under the new tax regime, the Section 123 (old 80C) deduction does not apply at all, so the comparison is only about returns, tax at withdrawal and lock-in.

Common questions

Which gives the highest return: PPF, ELSS or NPS?

PPF's return is fixed by the government (7.1% now). ELSS and NPS are market-linked, so their returns are not known in advance. Over 15 years, ELSS at an assumed 12% grows ₹1.5 lakh a year to about ₹62.63 lakh before tax, against ₹40.68 lakh for PPF, but neither the ELSS nor the NPS figure is guaranteed.

Which has the shortest lock-in?

ELSS, at three years for each instalment. PPF matures after 15 years with partial withdrawals from year 7. NPS is locked until 60 or 15 years in the scheme.

Is NPS covered by the ₹1.5 lakh Section 123 (old 80C) limit?

Your own NPS contribution can count towards Section 123 (old 80C), and up to ₹50,000 more is deductible under Section 124 (old 80CCD(1B)), both under the old regime only.

Sources

Checked 29 October 2026.