Save Tax under Rajiv Gandhi Equity Savings Scheme u/s 80CCG

The deduction under the Rajiv Gandhi Equity Savings Scheme shall be available to a new retail investor who complies with the conditions of the Scheme and whose gross total income for the financial year in which the investment is made under the Scheme is less than or equal to  ten lakh rupees.

Few points for new retail investor who shall make investments under the Scheme in the following manner :- 

• Deduction under this section is applicable to a new retail investor who can be any individual who has not opened a demat account and has not made any transactions in the derivative segment as on the date of notification of the Scheme or if has a demat account but has not initiated any transaction therein prior to the date of notification of the Scheme;
• the new retail investor may make investment in eligible securities in one or more than one transactions during the year in which the deduction has to be claimed;
• the new retail investor may make any amount of investment in the demat account but the amount  eligible for deduction, under the Scheme shall not exceed fifty thousand rupees; 
• the eligible securities brought into the demat account, as declared or designated by the new retail investor, will automatically be subject to lock-in during its first year, unless the new retail investor specifies otherwise and for such specification, the new retail investor shall submit a declaration in Form B indicating that such securities are not to be included within the above limit of investment; 
• the new retail investor shall be  eligible for a  deduction under subsection (1) of section 80CCG of the Act in respect of the actual amount invested in eligible securities, in the first financial year in respect of which a declaration in Form B has not been made, subject to the maximum investment limit of fifty thousand rupees; 
• the new retail investor who has claimed a deduction under sub-section (1) of section 80CCG of the Act, in any assessment  year, shall not be allowed any deduction under the Scheme for any subsequent assessment year; 
• the investment under the Scheme shall consist of all eligible securities covered under the Scheme that are initially bought by the investor under the Scheme or that are bought subsequently by the investor as per the provisions of the Scheme; 
• the deduction claimed shall be withdrawn if the lock-in period requirements of the investment are not complied with or any other condition of the Scheme is violated.
• The period of holding of eligible securities shall be three years to be counted in the manner detailed hereunder.

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