- As per Condition (d) new retail investor can avail this deduction . New retail investor means a person who has not traded stock or in derivatives before announcement of this scehme , though he may have opened a Demat account before schme announcement .
- As per conditions laid down under section 80CCG ,deduction shall be withdrawn in case of person fails to satisfy the conditions in after availing the deduction. Suppose a person has claimed the deduction when his income is less than 10 lakh (Limit increased to 12 lakh from Fy 2013-14) ,if his income for the next year increased from 10 lakh (Limit increased to 12 lakh from Fy 2013-14) then whether deduction will be revered or not it is not very much clear .If it is to be revered then person who's income is near to 10 lakh have to think twice before claiming this deduction.
- This deduction can be availed only once by Individual .If he has claimed any amount in a financial year then he can not claim deduction u/s 80 CCG again . Suppose person has invested Rs 10000 in Fy 2012-13 and claimed Rs 5000 u/s 80CCG then in next year he can not claim any amount even if he has invested more money in equity as per scheme .(Wef FY 2013-14 deduction can be claimed in three consecutive years )
- 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
- Investors would, however, be required to maintain their level of investment during these two years at the amount for which they have claimed income tax benefit or at the value of the portfolio before initiating a sale transaction, whichever is less, for at least 270 days in a year. The calculation of 270 days includes those days pursuant to the day on which the market value of the residual shares /units has automatically touched the stipulated value after the date of debit.
- 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.
- Scheme has been approved by Finance Minister on 21.09.2012
- Original Information in Budget Speech.
A new scheme called Rajiv Gandhi Equity Savings scheme is proposed in the Union Budget 2012-13 to encourage flow of saving in financial instruments and improve the depths of domestic capital market.
To encourage flow of savings in financial instruments and improve the depth of domestic capital market, it is proposed to introduce a new scheme called Rajiv Gandhi Equity Savings Scheme. The scheme would allow for income tax deduction of 50 per cent to new retail investors, who invest up to ` 50,000 directly in equities and whose annual income is below ` 10 lakh. The scheme will have a lock-in period of 3 years. The details will be announced in due course.