Who can invest in RGESS?

New retail investors with an annual gross income of less than Rs.10 Rs.12 lakhs.

How much can I invest?

The maximum amount eligible for claiming benefit under RGESS is Rs. 50,000.

Tax Benefit

Deduction under Section 80CCG of the Income-Tax Act, 1961, is available on 50% of the amount invested. The benefit is in addition to deduction available u/s Sec 80C.

Lock-in Period

3 years. Fixed lock-in during first year followed by a flexible lock-in for subsequent two years.

AIM: To encourage the savings of the small investors in domestic capital market.

Rajiv Gandhi Equity Savings Scheme (RGESS) announced in Union Budget 2012-13 is a new equity tax advantage savings scheme for equity investors in India. The scheme got it's approval on September 21, 2012. It is exclusively for the first time retail investors in securities market.

The investors who invest up to Rs.50,000 in 'Eligible Securities' and have gross total annual income less than or equal to Rs.10 Rs.12 Lakhs will benefit from a new section 80CCG under the Income Tax Act, 1961 on 'Deduction in respect of investment under an equity savings scheme' has been introduced to give tax benefits.

Example:
Let us say, you invest Rs.50,000 under RGESS, the amount eligible for tax deduction from your income will be Rs.25,000. Alternatively, if you invest Rs.40,000 under RGESS, the amount eligible for tax deduction will be Rs.20,000. So you may save about Rs.2,575, Rs.5,150 for income tax slabs 10% and 20% respectively under this scheme.

Latest Updates:

  • Effective 1 April 2014, investors with a gross total income of up to Rs.12 lakh can invest in RGESS, up from an earlier income limit of Rs.10 lakh. Investors can park funds in MFs and listed shares and extended tax benefits to three successive years.