Expanding the scope of RGESS deduction and eligibility u/s. 80CCG
The existing provisions of section 80CCG, inter-alia, provide that a resident individual who has acquired listed equity shares in accordance with the scheme notified by the Central Government, shall be allowed a deduction of fifty per cent of the amount invested in such equity shares to the extent that the said deduction does not exceed twenty five thousand rupees. The deduction is a one-time deduction and is available only in one assessment year in respect of the amount so invested. The deduction is available to a new retail investor whose gross total income does not exceed ten lakh rupees. Rajiv Gandhi Equity Savings Scheme has been notified under section 80CCG.
Finance Minister P. Chidambaram on Thursday proposed liberalising the Rajiv Gandhi Equity Savings Scheme to enable first time investors to park funds in MFs and listed shares and extended tax benefits to three successive years.
Also, the limit for investors wanting to invest in RGESS has been raised to Rs 12 lakh from Rs 10 lakh earlier.
The RGESS will be liberalised to enable first time retail investors to invest in mutual funds and listed shares and not in one year alone, but for three successive years, Chidambaram said while presenting the Budget 2013-14 in the Lok Sabha.
The RGESS, which was originally announced in the Budget for 2012-13, seeks to provide tax benefits to first-time investors in stock markets.
Under the scheme, an individual with an income of less than Rs. 12 lakh would get tax incentives for investing up to Rs. 50,000 in the stock market.
Comparative analysis of Changes with provisions introduced by Finance Budget 213