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Deduction Under 80CCG – Rajiv Gandhi Equity Savings Scheme

by Varun Advani | 25 June 2015

Section 80CCG has been inserted with effect from the assessment year 2013-14. A deduction is available under this section if the following conditions are satisfied –

 

 

  • 1.        The taxpayer is a resident individual (may be ordinarily resident or not ordinarily resident).
  • 2.        His gross total income does not exceed Rs.10 lakh (Rs.12 lakh from the assessment year 2014-15). The limit has not been changed for assessment year 2015-16 either.
  • 3.        He has acquired listed shares or listed units in accordance with a notified scheme.
  • 4.        The taxpayer is a new retail investor as specified in the above-notified scheme.
  • 5.        The investment is locked- in for a period of 3 years from the date of acquisition in accordance with the above scheme.
  • 6.        The taxpayer satisfies any other condition as may be prescribed.

 

 

If a resident individual under section 80CCG claims a deduction for the assessment year 2013-14, he shall not be entitled for any deduction under this section for any subsequent year. In other words, for the assessment year 2013-14, the deduction is available only in one assessment year to the extent of 50 per cent of amount invested during the previous year 2012-13 or Rs.25, 000 whichever is less.

 

However, this provision has been amended from the assessment year 2014-15. The modified provision permits deduction for three consecutive years, beginning with assessment year relevant to the previous year in which the listed equity share or listed units of equity oriented fund are first acquired.


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