1. Open your payslip. How much EPF already eats your 80C?
This is the check nobody does first. For most salaried filers, employer-deducted EPF (your contribution, not the employer match) already counts toward the ₹1.5 Lakh 80C cap. If your basic is ₹80,000/month, your EPF contribution alone is ₹9,600/month → ₹1.15L a year. You have ₹35K of headroom, not ₹1.5L.
Decide everything else around what's actually left. Skipping this step is how people end up "investing for tax saving" while their EPF was already maxing 80C and the new investments do nothing tax-wise.
2. What's your real horizon — the one you'll stick to?
Not "I plan to invest long-term." The horizon you'll actually leave the money alone.
- Under 5 years → ELSS is the only 80C option that even lets you exit (3-year lock-in). Returns will swing; if you'll panic-sell at -15%, this isn't for you either.
- 5–15 years → PPF or ELSS heavy. PPF has a 15-year lock but partial withdrawal opens from year 7.
- 15+ years and you're salaried → ELSS + NPS Tier-I works well. NPS forces you to stay invested till 60, which is the feature, not the bug.
NPS for a 5-year horizon? Don't. You can't exit till 60. People sign up for the ₹50K extra deduction and then realize they've locked away savings for 25 years.
3. What tax slab are you in — and will you still be in it next year?
PPF's "7.1% guaranteed" looks ordinary against ELSS's 12%-ish historical. But for a 30%-slab filer, the EEE status (tax-free contribution, tax-free interest, tax-free maturity) means there's no ₹3-4 Lakh tax bill at exit — which a ₹40L equity corpus might face.
In the 5% slab? PPF makes much less sense. The tax shield is small, and a well-run equity fund usually beats 7.1% net even after LTCG. Match the product to the tax you'd otherwise pay.
Also: if you moved to the New Regime, 80C deductions don't reduce your tax bill at all. PPF/ELSS are then pure investment choices — pick on returns, not on the "80C" label.
What I'd actually do
If I were 32, salaried, 30% slab, on Old Regime, EPF eating ₹80K of 80C already: I'd put the remaining ₹70K into ELSS, and use the separate ₹50K NPS 80CCD(1B) bucket. Skip topping up PPF — the EPF I'm already paying into is functionally the same (sovereign-backed, similar yield, locked).
If I were 50, same setup, retirement is 10 years away: I'd flip it — top up PPF with whatever's left after EPF, leave ELSS untouched (the 3-year window is too short for new equity money this close to needing it).
Updated May 26, 2026. PPF rate notified at 7.1% for Apr–Jun 2026 quarter; reviewed quarterly. ELSS returns shown are historical category averages, not promised.