Rajiv Gandhi Equity Savings Scheme or RGESS is a new equity tax advantage savings scheme for equity investors in India, with the stated objective of "encouraging the savings of the small investors in the domestic capital markets." It was approved by The Union Finance Minister, Shri. P. Chidambaram on September 21, 2012. It is exclusively for the first time retail investors in securities market. This Scheme would give tax benefits to new investors who invest up to Rs. 50,000 and whose annual income is below Rs. 12 lakh. In 2013-14, the income ceiling of the beneficiaries was raised to Rs. 12 lakh from Rs. 10 lakh specified in 2012-13. The Scheme not only encourages the flow of savings and improves the depth of domestic capital markets,but also aims to promote an 'equity culture' in India. This is also expected to widen the retail investor base in the Indian securities markets.

1. " To encourage the savings of the small investors in domestic capital market”
"

2. RGESS
 Rajiv Gandhi Equity Savings Scheme or RGESS is a
new equity tax advantage savings scheme for
equity investors in India.
 Rajiv Gandhi Equity Savings Scheme (RGESS)
announced in Union Budget 2012-13 is a new equity
tax advantage savings scheme for equity investors
in India.
 The scheme got it's approval on September 21,
2012. It is exclusively for the first time retail
investors in securities market.

3.  The Scheme not only encourages
the flow of savings and improves
the depth of domestic capital
markets, but also aims to
promote an 'equity culture' in
India.
 This is also expected to widen
the retail investor base in the
Indian securities market.
 Basically its one of the best
investment in tax saving in
India.

4. Example…
 Let us say, you invest Rs.50,000 under RGESS.
 The amount eligible for tax deduction from
your income will be Rs.25,000.
 Let us say, you invest Rs.40,000 under RGESS.
 The amount eligible for tax deduction will be
Rs.20,000.
 So you may save about Rs.2,575, Rs.5,150 for
income tax slabs 10% and 20% respectively
under this scheme.

5. Latest Updates…
 Effective 1 April 2014, investors with a gross
total income of up to Rs.12 Lakhs can invest in
RGESS, up from an earlier income limit of
Rs.10 Lakhs.
 Investors can park funds in MFs and listed
shares and extended tax benefits to three
successive years.

6. How the scheme works
 The RGESS is only for individuals who have
not invested directly in
 Equities.
 including shares .
 Derivatives,
* Before 23 November 2012. If you hold units
in an equity mutual fund, you are eligible to
invest in it under the present rules.

7. Continuation…
 If you have a demat account.
 But have not used it for transactions before
the specified date,
 you can avail of the RGESS benefits.
Besides, only those whose gross annual
income is up to Rs 12 Lakhs can invest.

8. Eligibility
Resident
Individual
Annual Income
< =Rs. 10 Lakhs
Demat
Account
Not Opened
No transactions in
Equity or F&O
New Retail
Investor
No transactions in
Equity or F&O
Demat Account
already Opened
Annual Income
< =Rs. 10 Lakhs
Resident
Individual
2nd & 3rd holder of an
account can open a new
account as 1st holder

9. Benefits
 The investor would get 50% deduction of the
amount invested during the year, up to a
maximum investment of Rs.50,000 per
financial year, from his/her taxable income
for that year, for three consecutive assessment
years.
 It provides additional tax benefits over and
above the present tax savings schemes under
the Income Tax Act.
 Gains, arising of investments in RGESS, can
be realized after a year. This is in contrast to
all other tax saving instruments.

10. Continuation…
 The benefits can be availed for three
consecutive years.
 Dividend payments are tax free.
 This scheme has a long run benefit of
educating the retail investment segment
and thereby moving towards financial
inclusivity in the country.

11. Continuation…
 Investments are allowed to be made in
instalments in the year in which the tax
claims are filed.
 Success of this scheme can lead to transfer
of assets from traditional savings
instruments such as bank deposits
 FDs to the capital markets, leading to
diversification in retail investor portfolio
and also leading to more productive
"capital formation" assets.

12.  Equity Shares in BSE-100 or CNX 100
 Equity Shares of Maharatna, Navratna, Miniratna
 Units of eligible ETFs or MFs
 Eligible FPOs & NFOs
 IPOs of eligible PSUs
Eligible Securities

13. A New Retail Investor Can Make Investments
Securities
Deduction
Form B
Act 80CCG
Account
Conclusion
Subsequent Year
Max Invest
Benefits Assessment
Open Account
Eligible Securities
Eligible Deduction
Form B for New Investors
80CCG Act For Eligible
Assessment Year Deduction
Benefits Under Schemes
Maximum Investment
Subsequent Assessment
Year
Conclusion

14. Open
Account
Eligible
Securities
Eligible
Deduction
Form B for
New
Investors
80CCG Act
For Eligible
Assessment
Year
Deduction
Benefits
Under
Schemes
Subsequent
Assessment
Year
Maximum
Investment
Conclusion
Procedure for a new
retail Investor

15. A Better Way to Save Tax in India
Who can invest in RGESS
New retail investors with an annual gross
income of less than Rs.12 Lakhs.
How much can I invest
The maximum amount eligible for claiming
benefit under RGESS is Rs. 50,000.
Tax Benefit
Deduction under Section 80CCG of the
Income-Tax Act, 1961, is available on 50% of
the amount invested. The benefit is in
addition to deduction available u/s Sec 80C.
Lock-in Period
3 years. Fixed lock-in during first year
followed by a flexible lock-in for subsequent
two years.

16. Flexible lock-in period
 The RGESS investment has a lock-in period
of three years. However, there is flexibility
after the first year of investment.
 This means that during the first year of
lock-in period, the investor cannot sell the
holdings forwhich he claims tax benefit.
 From the second year onwards, he can sell a
portion of his holdings, provided he
maintains the aggregate value in his
account for which benefit is claimed for the
next two years.

17.  For instance, if your initial investment of
Rs 50,000 rises to Rs 60,000 after the end
of first year of the lock-in period, you can
sell Rs 10,000 worth of securities and
maintain Rs 50,000 in the account for the
next two years.
 However, if the value declines to Rs
40,000, you are not required to make up
the balance. However, if you choose to sell
a part of your holdings from Rs 40,000,
you will need to replenish it.

18. May you think your investment in the right way
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