ELSS has the shortest lock-in of all 80C instruments — just 3 years. PPF locks for 15 years. If flexibility matters, ELSS wins. If you want zero market risk, PPF wins.
Worked examples
Kiran, 32, maxing 80C at ₹1.5L/year for 15 years
Kiran puts ₹1.5L/year in ELSS at 13% p.a. average. After 15 years: corpus of about ₹65L on ₹22.5L invested. LTCG of ~₹43L, tax paid at 10% on amounts above ₹1L/year: roughly ₹3.5L in tax. Net: ₹61.5L. PPF at 7.1%: maturity of ~₹40L, fully tax-free. ELSS wins by ₹21.5L post-tax. But not a single year of Kiran's ELSS was smooth.
Frequently asked questions
Can I withdraw ELSS before 3 years?
No. ELSS funds have a mandatory 3-year lock-in period from the date of each SIP installment. Even redeeming after 3 years is not automatic — you request a redemption.
Is PPF better for senior citizens?
PPF accounts cannot be opened by senior citizens (60+). Existing accounts can be extended. ELSS can be bought by anyone but is taxable on redemption.