What is RGESS?
Rajiv Gandhi Equity Saving Scheme (RGESS) is a tax incentive scheme started by Govt of India to promote first time investors to invest in Equity market.
What are the benefits of investing through RGESS?
You could claim a deduction in your taxable income of upto Rs 25,000 (ie 50% of your investment upto Rs 50,000). This can be taken under IT Section 80 CCG, which is over and above other deductions (including Rs 1 lakh as permitted under Sec 80C)
What are the risks?
Investing in Equity is subject to market risks, like any other market related instrument (including gold, mutual funds etc). However, the scheme has been designed with adequate safeguards to protect the interests of first time investors.
Some of these safeguards include restricting the investments to select large cap stocks, lock-in period with enough flexibility to take benefit of the positive market movements etc.
How is RGESS different from ELSS?
|Restricted only to Mutual Funds||Could be made through Direct equity, Mutual Funds, ETFs or a combination|
|Tax benefit under Sec 80 C of investment upto Rs 1 lac||Tax benefit under Sec 80 CCG, which is over and above Sec 80 C|
|Lock in period of 3 years||Lock in period of 3 years, however trading allowed after 1 year, subject to conditions|
What are the eligibility criteria?
This scheme is open only for first time investors who are resident Indians. In addition, individual should have –
1) Gross total income for the financial year less than or equal to Rs 10 lakh.
2) Not opened a demat account or not made any transactions as on the date of notification of the RGESS (Nov 2012)