PPF vs ELSS vs NPS: Which 80C Investment is Best in 2026?

Section 80C (₹1.5 lakh deduction) is the most-used tax break in India. The three main options: PPF, ELSS, and NPS Tier 1.

PPF: Safe but slow - Return: 7.1% p.a. (government declared, reset quarterly) - Lock-in: 15 years - Tax: EEE — exempt at investment, growth, and maturity - Risk: Zero (sovereign backed)

ELSS: Highest return, highest risk - Return: 12-14% historical CAGR for diversified equity funds - Lock-in: 3 years (shortest under 80C) - Tax: LTCG at 12.5% on gains above ₹1.25L/year - Risk: Market volatility; can fall 30-40% in bad years

NPS Tier 1: Retirement-focused hybrid - Return: 9-11% depending on equity-debt mix - Lock-in: Until age 60 - Tax: 60% corpus tax-free at 60, 40% must buy annuity (which is taxable) - Bonus: Additional ₹50K deduction under 80CCD(1B)

Our take For most 30-year-olds, ELSS is the right default — 3-year lock-in plus equity returns plus 12.5% LTCG is the best combination. PPF adds stability as part of a balanced 80C allocation. NPS makes sense for the extra ₹50K deduction only if you are comfortable locking in until 60.

Run your own numbers: PPF Calculator, SIP Calculator (for ELSS), NPS Calculator.