Rajiv Gandhi Equity Saving Scheme 2023 Registration | Rajiv Gandhi Equity Saving Scheme Eligibility | Rajiv Gandhi Equity Saving Scheme 80ccg
Today in this article we will talk about the latest scheme that is, the Rajiv Gandhi Equity Saving Scheme (RGESS), which was introduced by the Government of India in 2012 to encourage retail investors to invest in the equity market and deepen the Indian capital markets. The scheme was named after the late Prime Minister of India, Rajiv Gandhi, who had a vision for a developed and modern India. In this article, we have mentioned all the important aspects of this scheme such as benefits, eligibility criteria, features, the registration process, and many more. All you need is to read this whole article till the end and get all the mandatory information about this scheme.
Rajiv Gandhi Equity Saving Scheme 2023
The RGESS is a tax savings plan that offers tax benefits to first-time investors in the stock market. The program is designed to encourage individual investors to invest in the stock market and to help them build a diversified investment portfolio. According to RGESS, retail investors who have never invested in the stock market can invest up to Rs. 50,000 in eligible securities and receive a 50% tax deduction on the amount invested.
This means investors can claim a tax deduction of up to Rs.25,000 under Article 80CCG of the Income Tax Act. To be eligible for the scheme, investors must have an annual income of less than Rs. 12 lakhs and you must not have a Demat account before the system reporting date. In addition, investors must hold eligible securities for a minimum period of three years to receive tax benefits.
Overview Details of Rajiv Gandhi Equity Saving Scheme
| Name of the Article | Rajiv Gandhi Equity Saving Scheme |
| Name of the Scheme | Rajiv Gandhi Equity Saving Scheme |
| Launched by | Government of India |
| Launched for | New Retail investors |
| Year | 2013 |
| Official Website | https://nsdl.co.in/RGESS.php |
Objective of Rajiv Gandhi Equity Saving Scheme
The RGESS aims to encourage and encourage investment in the Indian stock market by providing tax benefits to eligible retail investors, particularly those who are new to the stock market, to enhance their participation in the Indian stock market. Capital market and help in developing the Indian economy.
Benefits of the Scheme
- This program offers tax advantages to first-time investors as they can claim a deduction of up to 50% of the amount invested under the program.
- The program is designed to encourage first-time investors to invest in stock markets and build a diversified investment portfolio.
- The minimum investment required to invest in the scheme is Rs. 500 which makes it accessible to retail investors.
- Investors can invest in stocks, mutual funds, and ETFs to build a diversified portfolio.
- The program has a vesting period of three years, encouraging investors to stay invested for the long term and take advantage of equity investing.
Features of Rajiv Gandhi Equity Saving Scheme
- The program is available to first-time retail investors whose annual income does not exceed Rs. 12 lakhs.
- The maximum investment limit under the scheme is Rs. 50,000 per financial year.
- At least 50% of the investments made under the scheme must be in shares of companies listed on the BSE or NSE.
- A deduction under the scheme is available for investments in stocks or stock funds or ETFs subject to a maximum of Rs. 50,000.
- Investments made under the program are subject to a lock-up period of three years from the date of investment, and investors can trade the shares after one year after the investment date.
Eligibility Criteria of Rajiv Gandhi Equity Saving Scheme
- The taxpayer must be a resident of India.
- The gross total income of the taxpayer should not exceed Rs. 12 lakhs.
- The taxpayer should be a first-time investor in equity shares or listed units of an equity-oriented fund.
- The investment should be made in the name of the taxpayer or their spouse.
- The investment should be locked in for a period of three years.
Required Documents List
- PAN card
- Address proof such as an Aadhaar card, voter ID, or passport.
- Income proof
- Proof of investment in equity shares or listed units of an equity-oriented fund.
- Declaration stating that the taxpayer is a first-time investor in equity shares or listed units of an equity-oriented fund.
- Form 26AS to verify TDS deducted.
- Copy of bank statement or passbook
Procedure to Make an Investment Under Rajiv Gandhi Equity Saving Scheme
- Forst candidates must check if they are eligible to invest in RGESS based on their income and net worth. To be eligible, your gross annual income should be below a certain limit and your net worth should be less than INR 50 lakhs.
- Those who do not have a demat account, open one with a registered depository participant (DP).
- Select a designated bank that is offering RGESS and submit the required documents to open a Demat account.
- You can invest in eligible securities such as equity shares of BSE 100 or CNX 100, or equity mutual funds that invest in such securities.
- Invest up to INR 50,000 in a financial year in RGESS. You can claim a deduction of 50% of the amount invested from your taxable income.
- Within 21 days of making the investment, submit Form A to your DP to claim tax benefits.
- Hold the securities for at least three years to be eligible for tax benefits. If you sell the securities before three years, the tax benefits claimed will be reversed.