Skip to content

What is Rajiv Gandhi Equity Saving Scheme (RGESS)?

What is Rajiv Gandhi Equity Saving Scheme (RGESS)?

 

Rajiv Gandhi Equity Saving Scheme

Rajiv Gandhi Equity Saving Scheme (RGESS) is a tax saving scheme which was introduced by the Government of India in its Union Budget 2012-13. The main motto behind this scheme is to promote the equity investments among people and also to attract public participation in equity market. The equity investment means investments in shares of companies that are included in the BSE-100 or CNX-100 by purchasing shares or ETFs/Mutual funds which invest in stocks approved by the RGESS scheme.

Rajiv Gandhi Equity Saving Scheme (RGESS) is available only for the Indian residents whose annual income is Rs.10 lakhs or less. The maximum deduction of Rs. 50,000 can be claimed which should be at the rate of 50 per cent of the amount invested in RGESS eligible securities. As a result, investors coming under the 10% or the 20% tax slab will have the benefit of Rs.2,500 or Rs.5,000 respectively. Under this scheme, only the new retail investor is eligible for tax deduction under section 80CCG of the Income Tax Act, 1961.

This scheme is available with a lock-in period of three years which can be explained as fixed lock-in period of 1 year and the flexible lock in period of 2 years. During the flexible lock in period, the investor can trade in the RGESS eligible securities with certain conditions. The investor should maintain the equal value of investments which have been claimed as tax benefit or the total value of portfolio whichever is less for at least 270 days in a year.

Read More:-

What is Equity Linked Savings Scheme (ELSS)?

What are the Things to know before investing in stocks?

What is Technical Analysis of Stocks?

What is Fundamental Analysis of Stocks?

What is Deflation?

What is SEBI (Securities and Exchange Board of India)?

What is an IPO (Initial Public Offering)?

What is Rajiv Gandhi Equity Saving Scheme (RGESS)?
5 (100%) 12 votes

Post your Comment