With the offer of tax benefits government want to connect the new small retail investors who have never invest before in to the equity market.
If you are invested in stock market through RGESS you can get benefit of both stock investment along with tax advantage benefits.
Who is Eligible for Investing in RGESS
- For all resident individual whose annual gross income is below 12 lakh for the financial year.
- Person whose doesn't have demat account.
- Have never invest before in equity market ( In case of demat account already opened, No transactions done in equity or derivatives trading)
How to Start Investing through RGESS
- First of all you need to open a demat account through a registered depository participant.
- If you have existing unused demat account where you have not traded, denote it with RGESS
- Purchase of securities of your choice in the eligible stock or mutual fund list.
Terms of Lock in Period
Like other market linked tax saving scheme the lock in period is three years under the RGESS. However the first year of investment is fixed locked and after one year it convert to flexible lock-in for remaining two year. It means during flexible lock in period investor can sell or book profit in the share or securities in his portfolio.
How much Tax you can save under RGSS
Under investing through RGESS new investor can invest upto Rs. 50,000 in eligible stocks or securities for getting additional tax benefits maximum upto Rs. 25,000 under section 80CCG.
This limit is excluding the currently available limit of Rs. 1,00,000 available under section 80C of the Income Tax Act.
For example if you invest Rs. 50,000 under Rajiv Gandhi Equity Saving Scheme, the total eligible amount for tax deduction from your income will be Rs. 25,000, or if you invest 30,000 under RGESS, the eligible amount for the tax deduction will be Rs. 15,000.
Let us assume that if you have to use the maximum investment limit Rs. 50,000 of RGESS, So you may get tax benefit of Rs. 2,575 and Rs. 5,150 according to the Income Tax slab structure of 10% and 20% respectively through this scheme.
Eligible Selected Stock or Mutual Fund List
First time investor can pick up his choice of stock or security in the stock list below to investing.
- Stock under NSE CNX 100 list
- Stock under BSE 100 list
- Companies including Maharatna and Navaratna ( Click for List )
- ETFs
- Mututal Fund
To know more about stock or security which is eligible for investing log on to NSE-RGESS
To open a new demat account find depository participant nearest by you NSDL
If you want to know more about the RGESS visit Rajiv Gandhi Equity Saving Scheme
Download FAQ in PDF format it may helpful to you to know more about RGESS.
