Section 80CCG of Income Tax Act

Under this section, individuals can avail for deductions by investing in the equity market thereby encouraging individuals to invest in equities. The main aim of providing tax relief to investors under this section is to promote India’s domestic capital market.

One has to fulfil the below-mentioned conditions to secure deduction under Section 80CCG:

• Only first-time investors in the equity market can avail deduction under this section.
• Investors gross total income should not exceed Rs 12 lakhs per annum.
• Individuals should have a valid demat account.
• Assessees are entitled to secure a 50% deduction on their investment amount.
• Maximum amount entitled for investment stands at Rs 50,000.
• The lock-in period of investment is 3 years.
• Investment should be made either in listed equity shares or units which are listed under the equity-oriented schemes or funds.
• Preferred stocks under this section should be listed either under BSE 100 or CNX 100 list or should be from public sector undertakings.
• Apart from this, mutual funds and ETFs are also qualified for deduction under this section.