In the absence of Equity Linked Saving Scheme (ELSS) under Direct Tax Code (DTC), equity investors are disappointed with no equity scheme is available for exemption except National Pension Scheme (NPS) under Section 80C.
But in the last budget (2012-13) the Government have introduced Rajiv Gandhi Equity Savings Scheme under section 80CG which allows Assessees to claim exemption from Income Tax Liability. Under this scheme, only first time retail investors in equity would be eligible to get exemption and the total anuual income of the assessees should not be more than Rs.10 lakhs. The first time retails investors should open a DEMAT Account and invest in this scheme to get the exemption. Others, who have opened DEMAT Account already are also eligible provided that they didn't make any transactions (they didn't buy any listed shares).
Investments made up to Rs.50,000/- is eligible and 50% of the amount invested can be exempted from Income tax. i.e. up to Rs.25,000/- can be claimed as exemption under this scheme. There are eligble Mutual Funds which are also available for invested under this scheme, one can invest in these funds to get exemption.
The invested amount gets locked-in for three years. Investors can't sell the shares or redeem the units under Mutual Funds for three years from the date of investment. One can continue to stay invested even after three years and can redeem at any time after that.
Importatn Points to remember:
> The exemption is available only for first time retails investors in equity market
> The Assesse should be a Resident of India
> The annual gross total income should be either less or equal to Rs.12 Lakhs
> To open a DEMAT Account
> Investment should be made in either eligible listed shares or ETFs/Mutual Funds Schemes
> The invested amount gets locked-in for three years
> There is no guarantee on return for the amount invested as it is linked with Stock Market
> One can't claim the exemption again if the exemption is already claimed in any financial year
0 comments: