Every year around January, developers suddenly remember they need to submit investment proofs. Then they scramble to pick something from the list HR sent.
Let me save you some time with a data-driven comparison.
Section 80C gives you up to Rs 1.5 lakh in deductions per year. The instruments differ massively in lock-in, liquidity, and actual post-tax returns.
ELSS (Equity Linked Savings Scheme)
Lock-in
3 years (shortest of all 80C options)
Returns
Market-linked, ~12-15% historical CAGR over 10yr
Tax on returns
LTCG at 12.5% after Rs 1.25 lakh threshold
Liquidity
After 3 years, fully liquid
Who it suits
Tech workers with 5+ year horizon, comfortable with equity risk
PPF (Public Provident Fund)
Lock-in
15 years (with partial withdrawal after 7)
Returns
7.1% p.a. (government-set, tax-free)
Tax on returns
ZERO. EEE status (exempt at investment, growth, and withdrawal)
Liquidity
Low. Loans allowed against it.
Who it suits
Anyone wanting guaranteed returns + full tax exemption
NPS (National Pension System)
Lock-in
Until age 60
Returns
Market-linked (choose equity/debt allocation)
Tax benefit
Additional Rs 50,000 deduction under 80CCD(1B) OVER the 1.5L limit
Tax on returns
60% of corpus tax-free at withdrawal; 40% mandatorily in annuity
Who it suits
High-income folks who want the extra 50K deduction; long-term focused
The REAL comparison for a developer earning Rs 20L+ per year in the new tax regime: if you are on the new tax regime, 80C deductions are NOT available. Repeat - the new tax regime does not allow 80C. So this entire exercise only applies if you opt for the old regime.
If you are on the old regime and want liquidity + solid returns: ELSS. If you want guaranteed safety + EEE: PPF. If you want the extra Rs 50K deduction: NPS.
Full comparison with returns data: 80C investment options compared: ELSS, PPF, NSC
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