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Benefits of RGESS compared to other tax saving schemes

Benefits of RGESS compared to other tax saving schemes
Rajiv Gandhi Equity Savings Scheme (RGESS) is a tax saving scheme, specially designed for the first time retail individual investors in securities market, who invest upto Rs. 50,000 and whose gross total income for the year is less than or equal to Rs. 12 lakh.

The following are the benefits of RGESS:

• The allowed tax deduction u/s 80 CCG will be over and above the Rs. 1 Lakh limit permitted under

Section 80 C of the IT Act, making it thus attractive for the middle class investors.

•The Dividend income is also tax free.

• Investor is free to trade / churn the portfolio after the lock in period in each of the years following the first year of investment subject to certain conditions.

• Gains arising out of higher market valuation of RGESS eligible securities can be realized after a year.

Provisions exist to protect the investor from general declines in the market to a certain extent. This is in

contrast to all other tax saving instruments.

• You can meet emergencies through pledging or even by selling off some stocks after the lock in

period. For investments upto Rs.50,000 in your sole RGESS demat account, if you opt for Basic Service

Demat Account, annual maintenance charges for the demat account is zero and for investments upto Rs. 2 lakh, it is stipulated at Rs 100.

• The investments can be made in installments during the first financial year in which tax deduction is


Read more about: rgess tax equity
Story first published: Wednesday, March 27, 2013, 12:29 [IST]
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