Know About the SCHEME:
1. The assessee is a resident individual (may be ordinarily resident or not ordinarily resident).
2. His annual taxable income does not exceed Rs. 10 lakhs.
3. He has acquired listed shares in accordance with a notified scheme.
4. The assessee is a new retail investor as specified in the above notified scheme.This sec. applies exclusively for the first time retail investors in Securities Market.
5. The total lock-in period for investments under the Scheme would be three years including an initial blanket lock-in period of one year, commencing from the date of last purchase of securities under RGESS. After the first year, investors would be allowed to trade in the securities in furtherance of the goal of promoting an equity culture and as a provision to protect them from adverse market movements or stock specific risks as well as to give them avenues to realize profits.
6. The assessee satisfies any other condition as may be prescribed
7. Amount of deduction -The amount of deduction is at 50% of amount invested in equity shares. However, the amount of deduction under this provision cannot exceed Rs. 25,000. If any deduction is claimed by a taxpayer under this section in any year, he shall not be entitled to any deduction under this section for any subsequent year.
8. Withdrawal of deduction – If the assessee, after claiming the aforesaid deduction, fails to satisfy the above conditions, the deduction originally allowed shall be deemed to be the income of the assessee of the year in which default is committed.
The Scheme not only encourages the flow of savings and improves the depth of domestic capital markets, but also aims to promote an ‘equity culture’ in India. This is also expected to widen the retail investor base in the Indian securities markets.
The new retail investors making investment for the very first time will be identified on the basis of their PAN numbers.
Under the Scheme, those stocks listed under the BSE 100 or CNX 100, or those of public sector undertakings which are Navratnas, Maharatnas and Miniratnas would be eligible. Follow-on Public Offers (FPOs) of the above companies would also be eligible under the Scheme. IPOs of PSUs, which are getting listed in the relevant financial year and whose annual turnover is not less than Rs. 4000 Crore for each of the immediate past three years, would also be eligible.
In addition to above, Exchange Traded Funds (ETFs) and Mutual Funds (MFs) that have RGESS eligible securities as their underlying and are listed and traded in the stock exchanges and settled through a depository mechanism.
Rajiv Gandhi Equity Savings Scheme from LIFE INSURANCE CORPORATION OF INDIA(LIC)
As announced in the Union Budget 2012-2012, the Finance Act 2012 has introduced a new section 80CCG on 'Deduction in respect of investment made under an equity saving scheme' to give tax benefits to "New Retail Investors".
"New Retail Investor" having Income less than or equal to Rs. 10 lakhs in the current Financial year.
New Retail Investor means
An individual who has not opened any demat account as on 23.11.2012 or
An Individual who has a demant account before 23.11.2012 ut has not made any transactions in the qeuity segment or the derivate segment till 23.11.2012 or
An individual who is not first account holder of an existing joint demat account.
Exclusive 50% Deduction from Income under Sec 80 CCG of IT Act, 1961 for investment upto Rs. 50,000/- over and above deduction of Rs. 1,00,000/- under Section 80C.
Tax Saving of Rs. 2575/- for investors under 10% slab ad Rs. 5150/- for investors under 20% slab.
Equity oriented Scheme investing in BSE 100 and CNX 100 stocks
Minimum Investment Rs. 5,000/- and thereafter in multiple of Rs.1/-.
Call at 9945556138 for planning LIC Insurance policy and safer investments