PPF, ELSS, NPS, life insurance, home loan principal — a ranked, honest comparison of which 80C options actually build wealth.
Section 80C lets you deduct up to ₹1.5 lakh from your taxable income — but only under the old regime. The choice of instrument matters far more than most people realise. A poorly chosen ULIP can lock your money for 5 years at 4% returns; a well-chosen ELSS can compound at 12–14% with a 3-year lock-in. This piece ranks the ten common options by long-term real return and flexibility.
| Instrument | Lock-in | Return | Tax on returns |
|---|---|---|---|
| ELSS | 3 yrs | 12–14% (mkt) | 10% LTCG above ₹1.25L |
| PPF | 15 yrs | 7.1% | Tax-free |
| NPS | Till 60 | 9–11% (mkt) | 60% tax-free, 40% annuity |
| SSY | 21 yrs | 8.2% | Tax-free |
| NSC | 5 yrs | 7.7% | Taxable |
| Tax FD | 5 yrs | 6.5–7.5% | Taxable |
A typical optimal mix for a 30-year-old salaried professional: ELSS for growth, PPF for stability, NPS for the additional ₹50,000 deduction, and term insurance for pure cover. Avoid bundled products that mix insurance and investment — they typically underperform pure products on both axes.
Don't buy products just to save tax — buy products that build wealth and happen to save tax. ELSS, PPF, NPS and term insurance, in the right ratio, cover both objectives for almost any salaried professional.
Senior contributor at Taxpex Consultancy. Reviewed by a practising Chartered Accountant. Published on 14 March 2026 · Updated on 14 March 2026.
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Yes — ₹50,000 additional deduction under Section 80CCD(1B), over and above ₹1.5L in 80C.
via NPS CalculatorNo. PPF is EEE — contribution, interest and maturity are all tax-free.
via PPF CalculatorYes — up to 60% withdrawal at maturity is tax-free. The remaining 40% must buy an annuity; pension income is then taxed at slab.
via NPS CalculatorAbsolute return ignores time; CAGR normalises the return to a per-year compounded rate — the standard measure for comparing multi-year returns.
via CAGR Calculator