Rajiv Gandhi Equity Savings Scheme (RGESS)
Posted on: 29/Dec/2017 12:05:39 PM
About RGESS
Rajiv Gandhi Equity Savings Scheme (RGESS) is a special scheme that allows the small Investors to save in the Domestic Capital market. This will provide the Investors the tax benefits under the section 80CCG in the Income tax Act.
This saving scheme for first time retail Investors was introduces in the year 2012-13 by the then Finance Minister, P. Chidambaram through Union Budget of India. RGESS’s objective was planned to encourage the retail savings in the domestic capital markets that advantages both the Investor and the Government to induce Equity culture in the nation’s income circulation.
Eligibility and Regulations
The RGESS plan can be availed only by the residents of India with an annual income not exceeding Rs 12 lakhs.
The person who is investing under this scheme should not have Demat Account dater before 23 November 2012. Otherwise the Investor can have a Demat account which is never really used for buying or selling.
RGESS allows a total maximum investment of Rs 50,000, in which 50% is tax deductible. So the maximum tax savings will be Rs 5150. It can provide a tax break for the Investor above One Lakh.
RGESS came with a lock in period of three years.
RGESS to be phased out
According to the 2017 Union budget of India RGESS was planned to phase out completely with the reasons that it is not regularly availed by the Citizens of India and it has more complex eligibility criteria for savings and tax benefits.
