# PPF vs ELSS vs NPS: Lock-ins, Tax and Returns (2026) > PPF vs ELSS vs NPS: lock-ins, tax in the old and new regimes, returns as assumptions, NPS exit rules at 60, and how INR 1.5 lakh a year grows in each. Source: https://trykosh.com/learn/ppf-vs-elss-vs-nps Guide - Investing # PPF vs ELSS vs NPS: which one, and when? All three are sold as tax savers, but they're very different products: a government-backed deposit, an equity fund with a short lock-in, and a pension account you can't fully touch until 60. Here's how they compare in FY 2026-27. Updated 25 October 20266 min readBy the Kosh team On this page[At a glance](#at-a-glance)[How each one works](#how-each-works)[Worked example: INR 1.5 lakh a year for 15 years](#example)[Tax in the old and new regimes](#tax-regimes)[How to choose](#how-to-choose)[Edge cases](#edge-cases)[FAQs](#faq) ## At a glance PPF, ELSS and NPS compared (FY 2026-27) PPF ELSS NPS (Tier I) What it is Government small-savings deposit Equity mutual fund Pension account, mix of equity and debt Return 7.1% for October to December 2026, reset quarterly Market-linked, not guaranteed Market-linked, not guaranteed Lock-in 15 years; partial withdrawals from year 7 3 years per instalment Until 60, with limited partial withdrawals Yearly limit INR 500 to INR 1.5 lakh No limit (deduction capped) No limit (deduction capped) Deduction, old regime 80C, within INR 1.5 lakh 80C, within INR 1.5 lakh 80C plus an extra INR 50,000 under 80CCD(1B) Deduction, new regime None None Only employer contribution, up to 14% of basic Tax on growth and exit Fully tax-free LTCG at 12.5% above INR 1.25 lakh a year 60% of corpus tax-free; pension taxed at slab Under the Income-tax Act, 2025, section 80C is now section 123 and 80CCD(1B) is section 124, but the limits are the same: INR 1.5 lakh and INR 50,000. Both apply only if you choose the old regime. Not sure which regime suits you? See [old vs new regime for FY 2026-27](/learn/old-vs-new-tax-regime-fy-2026-27). ## How each one works ### PPF A Public Provident Fund account runs for 15 financial years and can be extended in five-year blocks. You deposit between INR 500 and INR 1.5 lakh a year. The government sets the rate every quarter: **7.1% a year for October to December 2026**. Interest is worked out monthly on the lowest balance between the 5th and the end of the month, so deposit before the 5th. Loans are allowed from the third year and partial withdrawals from the seventh. Interest and maturity are tax-free in both regimes. ### ELSS An Equity Linked Savings Scheme is a diversified equity fund with a three-year lock-in, the shortest among 80C options. Returns follow the stock market, up and down. Gains held over 12 months are long-term: the first INR 1.25 lakh of equity gains each year is tax-free and the rest is taxed at 12.5%. Each SIP instalment is locked for three years from its own date. ### NPS The National Pension System invests in a mix of equity, corporate bonds and government securities, in proportions you choose within limits. The money is meant for retirement. At 60, under PFRDA's rules from December 2025, non-government subscribers must use **at least 20%** of the corpus to buy an annuity (a monthly pension) and can take **up to 80%** as a lump sum. Only **60% of the corpus is tax-free** under income-tax law; check how any lump sum above 60% is taxed before you withdraw it. Pension income is taxed at your slab. Leaving before 60 comes with stricter rules and a much larger compulsory annuity. ## Worked example: INR 1.5 lakh a year for 15 years Put INR 1.5 lakh a year (INR 12,500 a month) into each for 15 years, INR 22.5 lakh in all. The ELSS and NPS returns below are **assumptions**, not predictions. NPS is shown for someone investing from 45 to 60. INR 22.5 lakh invested over 15 years Assumed return Value at the end After tax on exit PPF 7.1% (today's rate, held flat) INR 40,68,209 INR 40,68,209, all tax-free ELSS 8% a year INR 43,54,314 INR 40,97,003 ELSS 10% a year INR 52,24,053 INR 48,53,676 NPS, age 45 to 60 9% a year INR 47,65,548 INR 38,12,438 lump sum (INR 28,59,329 tax-free) + INR 9,53,110 for a pension Figures from the [PPF calculator](/tools/ppf-calculator), [ELSS calculator](/tools/elss-calculator) and [NPS calculator](/tools/nps-calculator). A few things stand out: - **PPF's tax-free 7.1% is hard to beat on certainty.** ELSS at an assumed 8% only just edges past it after tax. ELSS needs equity-like returns to justify its risk. - **ELSS money isn't all free at year 15.** The last three years of instalments, about INR 5 lakh of the value, are still in their lock-in and unlock over the following three years. - **NPS's pension is small for a late start.** The INR 9.53 lakh annuity buys about INR 5,163 a month at an assumed 6.5% annuity rate, taxable at slab. NPS works best when started early. - **The deduction is the same for PPF and ELSS.** In the old regime at the 30% slab, a full INR 1.5 lakh under 80C saves INR 46,800 a year including cess. They share that one limit. ## Tax in the old and new regimes The regime you pick changes the comparison more than anything else: - **Old regime:** PPF and ELSS compete for the same INR 1.5 lakh 80C limit, alongside EPF, life insurance premiums, home-loan principal and children's tuition fees. Many salaried people fill 80C with EPF alone. NPS adds a separate INR 50,000 deduction under 80CCD(1B): at the 30% slab that saves INR 15,600 a year including cess. See the [section 80C guide](/learn/section-80c-deductions-guide). - **New regime:** none of the three gives a deduction for your own contribution. PPF keeps its tax-free interest. ELSS becomes an ordinary equity fund with a three-year lock-in, and loses its main advantage over funds without one. NPS still works through your employer: their contribution up to **14% of basic** is deductible in the new regime (10% in the old). The [NPS tax benefit calculator](/tools/nps-tax-benefit-calculator) works out the saving under both regimes from your salary and basic pay. ## How to choose Matching the product to the job If you want Look at Why Government-backed, tax-free growth for a long goal PPF Sovereign-backed, tax-free in both regimes Equity growth with a tax deduction, old regime ELSS Shortest 80C lock-in, market-linked returns Extra deduction beyond INR 1.5 lakh, old regime NPS 80CCD(1B) adds INR 50,000 A tax-efficient benefit in the new regime Employer NPS Deductible up to 14% of basic Money you may need within 5 years None of them Lock-ins and market risk don't fit short goals Many people use more than one: PPF as the stable core, equity (ELSS or otherwise) for growth, and NPS for an extra deduction or through the employer. Treat all three as part of your [retirement plan](/learn/how-much-money-to-retire-in-india), not as separate pots. ## Edge cases - **PPF for a child:** deposits in a minor's PPF account count within the same INR 1.5 lakh yearly limit as your own. - **NRIs** can't open a new PPF account; an account opened as a resident can continue to maturity. - **PPF after 15 years:** you can extend with or without fresh deposits, and the tax-free status continues. - **Rates change:** the 7.1% PPF rate is reviewed every quarter. The calculators hold today's rate flat, which is an assumption too. - **NPS close to retirement:** starting at 55 gives little time to build a corpus, and at least 20% must still go into an annuity. [Free tool**PPF calculator**See what your Public Provident Fund grows to at the current 7.1% rate, year by year, including how much the timing of your deposit matters.](/tools/ppf-calculator)[Free tool**ELSS calculator**Work out what an ELSS investment could save you in tax and grow to. It tracks the 3-year lock-in on every instalment and the tax when you sell.](/tools/elss-calculator)[Free tool**NPS calculator**Estimate what your National Pension System account could grow to, how it splits between lump sum and annuity at exit, and the monthly pension the annuity might pay. Returns and annuity rates are your assumptions.](/tools/nps-calculator)[Free tool**NPS tax benefit calculator**NPS is one of the few tax breaks left in the new regime. See what your employer's contribution and your own INR 50,000 save under each regime.](/tools/nps-tax-benefit-calculator)[Free tool**80C calculator**Add up what already counts toward 80C, see how much of the INR 1.5 lakh limit is left, and what filling it would save at your slab.](/tools/section-80c-calculator)[Free tool**Old vs new regime calculator**Find out which regime leaves you more money this year, and exactly how many more rupees of deductions the old regime would need to catch up.](/tools/old-vs-new-tax-regime-calculator) **Where Kosh fits** Kosh reads your salary slips, EPF and investment statements, shows how much of 80C you've already used, and works out your tax under both regimes with your real numbers. It explains product categories like these but never recommends specific funds. ## Frequently asked questions Which is better: PPF, ELSS or NPS? None is best for everyone. PPF offers government-backed, tax-free returns at a rate reset each quarter with a 15-year lock-in; ELSS offers market-linked returns with a three-year lock-in; NPS is a retirement account with an extra old-regime deduction. The right mix depends on your tax regime, goals and comfort with market risk. What is the current PPF interest rate? 7.1% a year for October to December 2026. The government reviews small-savings rates every quarter, so the rate can change for future quarters. Can I claim PPF, ELSS or NPS in the new tax regime? No deduction is available for your own contributions to any of them in the new regime. PPF interest remains tax-free, and your employer's NPS contribution up to 14% of basic salary is still deductible. How much of my NPS corpus can I withdraw at 60? Under PFRDA's rules from December 2025, non-government subscribers can take up to 80% as a lump sum and must use at least 20% to buy an annuity. Only 60% of the corpus is tax-free under income-tax law, so check the tax on any amount above that. What is the lock-in period for ELSS? Three years from the date of each investment. With a SIP, each instalment has its own three-year lock-in, so the last instalment unlocks three years after it was made. Is NPS tax-free on maturity? Partly. 60% of the corpus can be withdrawn tax-free. The pension from the annuity is taxed as income at your slab rate. ## Sources - [PFRDA (NPS)](https://www.pfrda.org.in/) - [India Post savings schemes](https://www.indiapost.gov.in/) - [Income Tax Department](https://www.incometax.gov.in/) Written by the Kosh team and checked against the rules in force on 25 October 2026. This guide is general information, not tax, legal or investment advice. Kosh is an educational financial planning tool by Primedepth Labs. It is not a SEBI-registered investment adviser and does not offer personalised investment advice, hold your money or execute trades. Markets carry risk; read scheme documents carefully and consult a registered adviser before acting. ## Upload your statement and Kosh does this for you. Kosh reads your bank and card statements, works out your tax under both regimes and turns guides like this one into your own numbers and next steps. [Start free](/signup?via=learn-ppf-vs-elss-vs-nps)