Rajiv Gandhi Equity Scheme . Objective. Rajiv Gandhi Equity Savings Scheme has been launched with the objective of encouraging savings of small investors in the domestic capital market. Who can invest?.
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There is a lock-in period of total three years. This lock-in period is further divided into two – fixed and flexible
Fixed Lock-in: The first one year from the date of investment is a fixed lock-in. During this period, you cannot sell any securities or pledge them to get loans.
Flexible Lock-in: The flexible lock-in period is for next two years from the date of the end of the fixed lock-in period. During this period, you are permitted to buy and sell eligible securities, provided that for a cumulative period of 270 days each year, you are maintaining the value of your initial investment. In short, the value of the investment portfolio should be equal to or more than the amount you’ve claimed as investments for the purpose of deduction under Section 80 CCG
As a retail investor, you can either invest a lumpsum or in parts (in one financial year). The treatment as to how the lock-in period works will really depend on the type of investment option, you’ve chosen
Option 1: You’ve made a lumpsum investment in RGESS
Option 2 : Here’s how the lock-in-period will work of your investments are bought in instalments.
You will get a deduction for investment up to Rs50,000. As per the Indian Income tax, a deduction is up to 50 percent of the amount invested in such equity shares to the extent such deduction does not exceed Rs 25,000. So, if you are in the lowest tax bracket of 10 percent your tax benefit will be Rs 2,500. And, if you are in the 20 percent tax bracket, your tax benefit will be Rs 5,000.