Gandhi Equity Savings Scheme is a tax-saving option available to first-time
equity investors. Under Section 80CCG of the Income Tax Act, an investor can
get an exemption of up to 50% of the amount invested in eligible securities
under this scheme. Any individual who has an income of not more than Rs. 10
lakh (Rs. 12 lakh, effective 1st April 2014) and has never
traded in equity or derivatives, can invest and avail of exemption under the
account is needed for investing under the RGESS. If the investor already has
one, he will have to designate it for availing of the benefit under the scheme.
Form A, prescribed under the RGESS 2012 notification, and a copy of the PAN
card also have to be provided to the depository participant for designating the
demat account for RGESS.
of up to Rs. 50,000 can be made in RGESS in a financial year. One can exceed
this limit, but the tax benefits can be claimed only for an investment of up to
holding period is one year from the date of investment. There is a flexible
term of two years immediately after the end of this period.
One can invest
only in scrips of the BSE-100, CNX 100, shares and IPOs of Maharatna, Navratna
or Miniratna PSU companies, NFOs and ongoing offers of mutual funds, ETFs or
schemes listed on the stock exchanges, which are declared RGESS-compliant by
Points to Note:
1. If an investor does not comply
with the RGESS guidelines, the deduction shall be reversed, and will be
considered the income of the assessee and liable to taxation.
2. The costs like brokerage and STT
shall not be included while considering investments of up to Rs. 50,000.