What is Public Provident Fund or PPF And ELSS ?


The Public Provident Fund (PPF) is a saving Scheme, which was launched in 1968 by the Ministry of Finance. This scheme is very beneficial for taxpayers because deposits made under this scheme can be claimed as tax deductions. The other benefit of The Public Provident Fund account is that the interest amount of PPF account is totally tax-free.

On the other hand, Equity-Linked Savings Schemes (ELSS) is a type of extend equity mutual fund which can be claimed for tax exemption under section 80C of the Income Tax Act. This scheme offers two big advantages one is capital saving and another is tax benefits. The main advantage of ELSS scheme is that it comes with a lock-in period of three years.

PPF And ELSS Fund Investment


Benefits Of The Public Provident Fund (PPF) And ELSS ?

PFF Scheme

PFF is a most beneficial and attractive saving scheme, which is designed by Indian ministry of Finance to create the awareness of savings. This scheme is quite popular for tax savings as the amount of PPF can be claimed for tax relaxation and the internet on the PPF saving are tax-free. The other benefits of this scheme are that opening and heading of PFF account is very simple. You don’t need to put extra efforts in opening PPF account. The other most vital advantage of Public Provident Fund is that whenever you want to withdrawal your money from your account you can withdraw it without any mess up.

ELSS Scheme

ELSS is a most beneficial instrument of tax saving as compared to other schemes. This fund schemes will help you to grow your money parallel with the stock market. Under the scheme of ELSS mutual funds, you can save tax up to Rs 1 Lakh, which is more than PFF and other tax saving scheme. Usually, all the schemes are launched with the lock in period which is more than 10 years only ELSS mutual fund scheme offered 3 years lock in period which is much shorter than the PFF and other plans.

Since ELSS come with a three-year lock-in period, you are forced to keep your funds minimum of 3 years. This time framing would help you to grow your money on the basis of market fluctuations. The interest rate of ELSS mutual funds is also high as compared to other schemes and it is absolutely tax-free. Yes, this is true the interest amount that you received after the one year in equity funds is tax-free. Besides ELSS, PFF interest amount is also tax-free but it comes with a fifteen years lock-in a period, which is comparatively very high and to avail this interest you have to wait for 15 years. There are many factors which prove that ELSS is better than PFF. Not only lock in a period, the earning potential of an equity-linked scheme is also high. In ELSS, you can choose the dividend option through which you can earn some gain during the lock-in period.

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