Rajiv Gandhi Equity Savings Scheme

The Rajiv Gandhi Equity Savings scheme was introduced to introduce the habit of equity investment amongst the masses in India. In the Rajiv Gandhi Equity Savings Scheme, income tax deduction under

Section 80CCG of upto Rs.25000 was provided for taxpayers who invested in designated listed equity shares. Its important to note that no deduction will be allowed under Section 80CCG for the assessment year commencing, on or after 1 April, 2018 (FY 2017-18 i.e. 1 April, 2017 to 31 March, 2018). However, if a person made the first investment on or before 31 March, 2017, he/she can continue to avail Section 80CCG deduction on the investment for three consecutive previous years. In this article, we look at the Rajiv Gandhi Equity Savings Scheme in detail.

Section 80CCG Deduction

The key feature of the Rajiv Gandhi Equity Savings scheme was the income tax deduction under Section 80CCG of upto Rs.25000. Under Section 80CCG deduction, the amount invested by the taxpayer in listed equity shares or listed units of an equity oriented fund under ‘Rajiv Gandhi Equity Savings Scheme’ is allowed while computing total income of the previous year in which the said investment is made. Deduction under Section 80CCG is limited to Rs.25000 being 50% of the amount invested in designated securities.

Section 80CCG Deduction Eligibility

Taxpayers can claim deduction under Section 80CCG will be subject to the following conditions:

The gross total income of the assessee for the relevant assessment year does not exceed Rs.12,00,000.
The assessee is a new retail investor as may be specified under the scheme. (Definition of New Retail Investor)
The investment is made in listed equity shares or listed units of equity oriented fund that are designated under the Rajiv Gandhi Equity Savings Scheme.
The investment is locked-in for a period of three years from the date of acquisition.

If the assessee, in any previous year, failed to comply with any of the above conditions, the deduction originally allowed will be deemed to be the income of the assessee of in the previous year and liable to tax.

Investment Eligible for Section 80CCG Deduction

Investments in equities listed in BSE 100 or CNX 100, shares of public sector companies categorised by the Government as Maharatna, Navratna, or Miniratna are eligible for Section 80CCG deduction.

(Full list of investments eligible for Section 80CCG Deduction).

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Frequently Asked Questions

Common questions about Rajiv Gandhi Equity Savings Scheme: Tax Benefits & Investment Guide.

The Rajiv Gandhi Equity Savings Scheme was introduced by the Indian government to encourage equity investment among the general public. It provided an income tax deduction under Section 80CCG of up to Rs. 25,000 for taxpayers who invested in designated listed equity shares.

To be eligible for the Section 80CCG deduction, the taxpayer's gross total income for the relevant assessment year should not exceed Rs. 12,00,000. Additionally, the taxpayer should be a new retail investor, and the investment should be made in listed equity shares or listed units of an equity-oriented fund designated under the scheme.

The maximum deduction allowed under Section 80CCG is Rs. 25,000, which is 50% of the amount invested in designated securities under the Rajiv Gandhi Equity Savings Scheme.

Yes, the investments made under the Rajiv Gandhi Equity Savings Scheme are subject to a lock-in period of three years from the date of acquisition.

If an investor fails to comply with any of the conditions of the scheme in any previous year, the deduction originally allowed will be deemed as the income of the investor for that previous year and will be liable to tax.

Investments in equities listed in BSE 100 or CNX 100, shares of public sector companies categorized by the government as Maharatna, Navratna, or Miniratna are eligible for the Section 80CCG deduction.

No new deductions will be allowed under Section 80CCG for the assessment year commencing on or after April 1, 2018 (FY 2017-18). However, if an individual made the first investment on or before March 31, 2017, they can continue to avail of the Section 80CCG deduction on that investment for three consecutive previous years.

The primary purpose of the Rajiv Gandhi Equity Savings Scheme was to introduce and promote the habit of equity investment among the general public in India.

Yes, the article mentions that a full list of investments eligible for the Section 80CCG deduction is available, but it does not provide the list itself.

No, the deduction under Section 80CCG is only applicable for investments made in designated securities under the Rajiv Gandhi Equity Savings Scheme after its introduction.