Investment u/s 80 C- Equity or PPF
Dear Friends,
Budget 2015 raised exemption u/s 80C to Rs. 1.50 lacs per annum. This presents a great opportunity to individuals to invest and save tax. But the question is which is a better investment vehicle for sec 80 C :
- Is it Equity Linked Saving Schemes (ELSS)
- Is it PPF
- Is it LIC
While each instrument has its own merits and demerits, the right instrument of investment is subjective i.e. it depends upon an individual investor, based on his own risk-taking appetite and thought processes.
I am presenting few facts on above investment avenues for an individual to take a decision. I will restrict myself to give comparison between PPF and ELSS only.
In my personal opinion, While PPF has its merits of a steady return of 8% app, if an investor can hold his investment and not be swayed by market gyrations…then he must opt for ELSS also ie an investor should have both PPF and ELSS.
Picture speaks louder than words. As such presenting last 35 year return synopsis in Gold/FD/Sensex/PPF/LIC.
With warm regards,
Samrendra Tibarewalla, CFPCM
PS: You are the best manager of your money. Please take informed decisions only.
Disclaimer : The author in no way will be held responsible for losses incurred on the basis of above re commendations. The investors are advised to take independent decisions after verifying all facts.
FAQ: Choosing Between ELSS, PPF, and LIC for Section 80C Investments
1. What was the update to exemption under Section 80C in the 2015 Budget?
The 2015 Budget increased the exemption limit under Section 80C to Rs. 1.50 lakhs per annum, offering individuals an opportunity to invest and save on taxes.
2. Which investment vehicles are available for Section 80C deductions?
The main investment vehicles for Section 80C deductions are Equity Linked Saving Schemes (ELSS), Public Provident Fund (PPF), and Life Insurance Corporation (LIC) policies.
3. How should an individual choose the right Section 80C investment?
The choice of investment under Section 80C depends on the individual’s risk appetite and financial goals. Each option has its merits and demerits, making the decision subjective.
4. What are the main differences between PPF and ELSS?
PPF offers a steady return of approximately 8% with low risk, while ELSS, being market-linked, offers potentially higher returns but comes with higher risk and volatility.
5. Why might an investor choose ELSS over PPF?
An investor might choose ELSS over PPF if they are seeking higher potential returns and are comfortable with the associated risks and volatility of the equity market.