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Benefits for 80C, 10(10D) and no LTCG.

Section 80CCG

Section 80CCG is commonly known as the Rajiv Gandhi Equity Savings Scheme. It is a tax-saving scheme which came into effect post the 2012-2013 Union Budget of India. As per the scheme, first time retail investors are entitled to tax benefits.

The purpose of the scheme is to increase the savings for investors who invest into the domestic capital market.

Since 1st April 2017, the scheme has been phased out completely due to lack of adoption.

Section 80CCG of the Income Tax Act

In order to increase the investment in securities, a first-time investor is allowed a deduction on their equity investment under Section 80CCG of the Income Tax Act, 1961. This is over and above the deductions available under Section 80C of the Income Tax Act, 1961.

Section 80CCG Deduction

Under Section 80CCG, a deduction of upto ₹50,000 being on their initial investment. (50% of the total investment amount, maximum upto ₹50,000/-.

Note: Due to lack of mass adoption, this scheme was phased out post 1st April 2017. Therefore, new investors will not be eligible for any deduction under Section 80CCG.

Investment Eligible under Section 80CCG

The investment eligible under Section 80CCG can comprise of securities of BSE/CNX100/Shares of Maharatna/Navratna/Miniratna/ETFs/Mutual Funds/Select IPOs of public sector undertakings.

Deduction for Investment under Rajiv Gandhi Equity Savings Scheme - Answered above.

Conditions for Availing Section 80CCG Deduction

Mentioned below is the eligibility criteria for availing deduction under Section 80CCG.

  1. Available to first time investors only.
  2. The gross annual income of an investor show be under Rs. 12 lakhs.
  3. Investment will have to complete the mandatory lock-in period of 3 years.
  4. The maximum deduction amount is ₹50,000.

Frequently Asked Questions

When was the RGESS announced?

The Rajiv Gandhi Equity Savings Scheme was announced in 2012 by the then finance minister P. Chidambaram on 21st Sep, 2012. It came into effect in 2012-13 and was phased out in 2017.

Do I need a demat account to be eligible for RGESS?

Yes, you need a valid demat account to make your first trade or a new demat account which has never been used to make an investment.

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