Public Provident Fund vs ELSS returns: PPF is considered a long-term investment option and majority of the earning individuals turn to PPF for retirement funding as it gives them income tax benefits under Section 80C of the Income Tax Act 1961. However, there is Equity Linked Saving Scheme (ELSS) mutual funds where one can get income tax exemption under Section 80C of the Income Tax Act on up to Rs 1.5 lakh investment in a year. However, there are some difference in between these two investment options and one must know that. According to the tax and investment experts, PPF investment falls under the 'EEE' category as it gives income tax exemption on investment, interest earned and the maturity amount while in ELSS mutual funds, one can claim income tax exemption on up to Rs 1.5 lakh investment in a financial year while interest earned and the maturity amount is taxable if the interest earned in ELSS mutual funds beyond Rs 1 lakh is taxable.

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Speaking on the ELSS mutual funds and the PPF investments SEBI registered tax and investment expert Jitendra Solanki said, "In ELSS mutual funds, income beyond Rs 1 lakh is taxable as 10 per cent LTCG is applicable on the maturity amount of the ELSS mutual funds. But, in case of PPF, it's tax exempted under EEE category." Asked about the returns that one can expect in PPF and ELSS mutual funds Solanki said that in any type of equity mutual fund, one can expect at least 12 per cent returns in the long-term time horizon while in PPF, one can expect around 8 per cent returns in the long-term. Though, the PPF interest rate currently is 7.9 per cent for January to March 2020 quarter.

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On the basis of this average returns in PPF and ELSS mutual funds, suppose someone invests Rs 3,000 per month in both PPF and ELSS mutual fund. Then assuming 8 per cent returns in the PPF after 15 years, an investor would get Rs 10,55,674 as maturity amount. 

Similarly, assuming 12 per cent returns in the ELSS mutual funds, an investor's Rs 3,000 per month or Rs 100 per day would give Rs 14,98,741 maturity amount while the investors' investment would be same Rs 5,40,000. Means the ELSS investor can expect near 42 per cent more as maturity amount on same investment pattern that he or she has adopted in PPF.

In simple terms, one's Rs 3,000 per month or Rs 100 per day (3000/30=100) would become Rs 10,55,674 in fifteen years while in this period, the investor has invested Rs 5,40,000 only.