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Rajiv Gandhi Equity Savings Scheme is an equity tax advantage savings policy for people interested in equity investments in the country with the aim of promoting savings in the small investment segments. The scheme is an exception for the first-time investors in security market. This scheme would give tax benefits to new investors who invest up to INR 50,000 with annual incomes less than INR 12 lakh.
Deductions under this policy come to a retail investor who satisfies the conditions under the scheme and where the total income for the financial year of the investment done along the scheme is smaller or equal to INR 12,000,00. In the session 2013-14, the income top ceiling for the beneficiaries stood at INR 12 lakh from INR 10 lakh as stated in the year 2012-13. Eligibility :
A 3-year horizon is required for the investment as per this policy. There are two lock in periods:
Maximum permissible investment: Maximum investment amount through this scheme stays at INR 50,000.
In order to invest in Rajiv Gandhi Equity Savings Scheme one has to open a demat account with any of the registered brokers. The documents required for the same are:
Are ELSS tax free?
The ELSS is an equity mutual fund under diversification that contains a large segment of the invested corpus in the form of equities. For the purpose of tax, returns from these mutual fund are not completely tax free. One may claim up to INR 1.5 lakh of the ELSS investment in the form of deduction out of the gross total income for a given financial year. This is done under Section 80C of the ITA.
Are mutual funds returns taxable?
When investment stays for more than 1 year, they are considered long term capital gains. Such a return is not out of the ITA purview as per the current laws. Yet, when investments are held for less than a year or a year, then the returns come to be taxed as short-term capital gain
Does ELSS comes under section 80ccg?
The ELSS comes with tax benefits along the section 80C of the Income Tax Act. As an exception to most other mutual funds, the ELSS 3-year lock-in period. This is because of the benefits from Section 80C.
How do I invest under section 80ccg?
When you earn below INR 12 lakh annually and have stayed out of equities investments previously, you become eligible for investments towards RGESS. One may invest in the scheme and gather tax deductions of maximum INR 25,000 as under Sec 80CCG of the Income Tax Act.
How do I open a RGESS account?
The DEMAT account can easily be initiated for opening through a DP of Central Depository Services India Ltd. or the National Securities Depositories Ltd.
How is Section 80g deduction calculated?
When you donate money to charity, social purpose, philanthrpy or when initiate contributions into the National Relief Fund, you can utilise the donations to bring down tax output via tax benefits of Section 80G ITA.
Is RGESS discontinued?
The scheme has been discontinued since 1st April, 2018. New investment is not welcome with this scheme now. Yet, as stated above, ELSS is an option that allows you to invest through the Section 80C. ELSS remain closed equity mutual funds which becomes open ended after the completion of the lock-in period, where exemptions to taxation are packagaed under Section 80C.
What is RGESS mutual fund?
In the world of tax savings instrument, various institutions have added an option known as Rajiv Gandhi Equity Savings Scheme (RGESS). This is an effort to promote first time investors towards equity investments, whether direct or indirect, that lead to tax benefits.
What is RGESS SEC 80ccg?
Rajiv Gandhi Equity Saving Scheme Share is aimed at encouraging retail investment towards shares and mutual funds. The establishment has brought about the RGESS that follows deductions as per Section 80CCG with the aim of investing in particular equity shares and Mutual Fund.
What is Section 80ee?
Section 80EE is a clause of deductions. The amount that passes as repayment of principal amount in the home loan by an individual is open for tax deduction along Section 80C of the Income Tax Act.